75 minute read

ACCT 567 Accounting for Government and NFP Course

ACCT 567 Accounting for Government and NFP https://www.hiqualitytutorials.com/product/acct-567-accounting-government/ A+ Entire Course: Homework Week 1-7| Discussions Week 1-7| Case Study Week 2, 5| Quiz Week 3, 5| Midterm Exam| Final Exam Homework Week 1 Exercise 1-3 Financial Statements Activities Basis of Accounting Measurements https://www.hiqualitytutorials.com/product/exercise-1-3-financial-statements/ Chapter 1 - Exercise 1-3 Preview:

Activities or Funds Financial Statements

Reported

Basis of Accounting

Statement of net assets-government-wide GA and BTA A Statement of activities-government-wide GA and BTA A

Exercise 2-3 True or False https://www.hiqualitytutorials.com/product/acct-exercise-true-false/ True or False. Write T if the corresponding statement is true. If the statement is false, write F and state what changes should be made to make it a true statement.

1. Activities of a general purpose government that provide the basis for GASB’s financial accounting and reporting framework consist of governmental, business-type, and fiduciary. 2. The permanent fund is one of the several types of governmental funds. 3. Government-wide financial statements report financial transactions related to the governmental, business-type, and fiduciary activities of the government. 4. A statement of revenues, expenditures, and changes in fund balances is used to report the inflows and outflows of current financial resources of governmental funds. 5. The accounting system for proprietary funds should provide for integration of budgetary accounts. 6. Financial information for component units must be reported by discrete presentation. 7. All assets, both current and noncurrent, and all liabilities, both current and noncurrent, are reported in the government-wide financial statements. 8. All proprietary fund financial information is reported in the Business-type Activities column of the government-wide financial statements. 9. Depreciation should be reported in the financial statements of the General Fund for general capital assets accounted for in the General Fund.

10. In addition to the General Fund, in governmental and proprietary fund financial statements, the only individual funds for which financial information is reported in separate columns are major funds. City of Middleville Case Study https://www.hiqualitytutorials.com/product/acct-567-city-middleville/ ACCT 567 Case Study City of Middleville Week 2 The General Fund of Middleville has presented you with the following trial balance as of June 30, 2011. Debits Credits Cash $ 40,000

Taxes Receivable- Delinquent 142,000 Estimated Uncollectible Taxes- Delinquent 9,100 Interest and Penalties Receivable 32,000 Vouchers Payable 24,000 Budgetary Fund Balance-Reserve for Encumbrances 10,200 Fund Balance _________ 170,700 $ 214,000 $214,000 The information that is being presented to you pertains to the transactions for the city of Middleville for the fiscal year ended June 30, 2012. The following budget was adopted by the city council: Estimated Revenues: Property Taxes $ 650,000 Fines and Penalties 44,000 Licenses and Permits 150,000 Federal Grant 85,000 929,000 Appropriations and Other Financing Uses Public Safety 402,000 General Government 263,000 Public Works 102,000 Parks and Recreation 92,000 Transfers Out 34,000 893,000 Encumbrances outstanding at the end of the year were re-opened. Property taxes of $ 660,000 were levied. It is estimated that 2.5% of the property taxes levied are expected to be uncollectible/ Purchase orders issued for the 2012 fiscal year were as follows: Public Safety, $ 395,000; General Government, $ 259,000; Public Works, $ 100,000; Parks and Recreation, $ 98,000. Cash collected for the Federal Grant from the Federal Government, $ 94,000. Cash collected and transferred in as follows: Fines and Penalties 43,000 Licenses and Permits 164,000 Cash collected on property taxes were as follows: Current taxes, $559,000, Delinquent Taxes, $ 41,000 and $ 22,000 of interest and penalties were collected. Purchase orders issued in 2012 in the following amounts were filled in at the following amounts: Estimated Actual Public Safety $ 395,000 $ 393,600 General Government $ 259,000 $ 258,200 Public Works $ 100,000 $ 99,400 Parks and Recreation $ 98,000 $ 97,500 $ 852,000 $ 848,700 Vouchers paid amounted to $ 840,000 and the transfer out to the Debt Service Fund, $34,000. Please reclassify the Taxes Receivable –Current and Estimated Uncollectible Taxes- Change from Current to Delinquent. Preview:

Part A Debit Credit

1 General Fund

Estimated Revenues

929,000

Appropriations

893,000

Budgetary Fund Balance

36,000

2 General Fund Encumbrances 10,200

Recording General Fund Operating Budget and Operating Transactions Problem 3-9 https://www.hiqualitytutorials.com/product/acct-recording-general-fund/ Recording General Fund Operating Budget and Operating Transactions. The Town of Bedford Falls approved a General Fund operating budget for the fiscal year ending June 30, 2011. The budget provides for estimated revenues of $2,700,000 as follows: property taxes, $1,900,000; licenses and permits, $350,000; fines and forfeits, $250,000; and intergovernmental (state grants), $200,000. The budget approved appropriations of $2,650,000 as follows: General Government, $500,000; Public Safety, $1,600,000; Public Works, $350,000; Parks and Recreation, $150,000; and Miscellaneous, $50,000. Required

1. Prepare the journal entry (or entries), including subsidiary ledger entries, to record the Town of Bedford Falls’s General Fund operating budget on July 1, 2010, the beginning of the Town’s 2011 fiscal year.

2. Prepare journal entries to record the following transactions that occurred during the month of July 2010.

3. Revenues were collected in cash amounting to $31,000 for licenses and permits and $12,000 for fines and forfeits.

4. Supplies were ordered by the following functions in early July 2010 at the estimated costs shown:

1. During July 2010, supplies were received at the actual costs shown below and were paid in cash. General Government, Parks and Recreation, and Miscellaneous received all supplies ordered. Public Safety and Public Works received part of the supplies ordered earlier in the month at estimated costs of $10,700 and $5,900, respectively.

1. Calculate and show in good form the amount of budgeted but unrealized revenues in total and from each source as of July 31, 2010.

2. Calculate and show in good form the amount of available appropriation in total and for each function as of July 31, 2010. Property Tax Calculations and Journal Entries Problem 4-4 https://www.hiqualitytutorials.com/product/acct-property-tax-calculations/ Property Tax Calculations and Journal Entries. The Village of Darby’s budget calls for property tax revenues for the fiscal year ending December 31, 2011, of $2,660,000. Village records indicate that, on average, 2 percent of taxes levied are not collected. The county tax assessor has assessed the value of taxable property located in the village at $135,714,300. Required

1. Calculate to the nearest penny what tax rate per $100 of assessed valuation is required to generate a tax levy that will produce the required amount of revenue for the year.

2. Record the tax levy for 2011 in the General Fund. (Ignore subsidiary detail and entries at the government-wide level.)

3. By December 31, 2011, $2,540,000 of the current property tax levy had been collected. Record the amounts collected and reclassify the uncollected amount as delinquent. Interest and penalties of 6 percent were immediately due on the delinquent taxes, but the finance director estimates that 10 percent will not be collectible. Record the interest and penalties receivable. (Round all amounts to the nearest dollar.) The City of Eldon Problem 4-6 Special Revenue Fund, Voluntary Nonexchange Transactions https://www.hiqualitytutorials.com/product/acct-special-revenue-fund/ The City of Eldon applied for a competitive grant from the state government for park improvements such as upgrading hiking trails and bike paths. On May 1, 2011, the City was notified that it had been awarded a grant of $200,000 for the program, to be received in two installments on July 1, 2011, and July 1, 2012. The grant stipulates that $100,000 is for use in each of the city’s fiscal years ending June 30, 2012, and June 30, 2013. Any amounts not expended during FY 2012 can be carried over for use in FY 2013. During FY 2012, the city expended $90,000 for park improvements from grant resources. Required For the special revenue fund, provide the appropriate journal entries, if any that would be made for the following: 1. May 1, 2011, notification of grant approval. 2. July 1, 2011, receipt of first installment of the grant. 3. During FY 2011 to record expenditures under the grant. 4. July 1, 2012. The City of Ashland’s Problem 4-10 https://www.hiqualitytutorials.com/product/acct-567-operating-transactions/ Operating Transactions, Special Topics, and Financial Statements. The City of Ashland’s General Fund had the following post-closing trial balance at April 30, 2010, the end of its fiscal year: During the year ended April 30, 2011, the following transactions, in summary form, with subsidiary ledger detail omitted, occurred:

1. The budget for FY 2011 provided for General Fund estimated revenues totaling $3,140,000 and appropriations totaling $3,100,000.

2. The city council authorized temporary borrowing of $300,000 in the form of a 120-day tax anticipation note. The loan was obtained from a local bank at a discount of 6 percent per annum (debit Expenditures for discount).

3. The property tax levy for FY 2011 was recorded. Net assessed valuation of taxable property for the year was $43,000,000, and the tax rate was $5 per $100. It was estimated that 4 percent of the levy would be uncollectible.

4. Purchase orders and contracts were issued to vendors and others in the amount of $2,059,000.

5. The County Board of Review discovered unassessed properties with a total taxable value of $500,000. The owners of these properties were charged with taxes at the city’s General Fund rate of $5 per $100 assessed value. (You need not adjust the Estimated Uncollectible Current Taxes account.)

6. $1,961,000 of current taxes, $383,270 of delinquent taxes, and $20,570 of interest and penalties were collected.

7. Additional interest and penalties on delinquent taxes were accrued in the amount of $38,430, of which 30 percent was estimated to be uncollectible.

8. Because of a change in state law, the city was notified that it will receive $80,000 less in intergovernmental revenues than was budgeted.

9. Total payroll during the year was $819,490. Of that amount, $62,690 was withheld for employees’ FICA tax liability, $103,710 for employees’ federal income tax liability, and $34,400 for state taxes; the balance was paid to employees in cash. 10. The employer’s FICA tax liability was recorded for $62,690. 11. Revenues from sources other than taxes were collected in the amount of $946,700. 12. Amounts due the federal government as of April 30, 2011, and amounts due for FICA taxes, and state and federal withholding taxes during the year were vouchered. 13. Purchase orders and contracts encumbered in the amount of $1,988,040 were filled at a net cost of $1,987,570, which was vouchered. 14. Vouchers payable totaling $2,301,660 were paid after deducting a credit for purchases discount of $8,030 (credit Expenditures). 15. The tax anticipation note of $300,000 was repaid. 16. All unpaid current year’s property taxes became delinquent. The balances of the current tax receivables and related uncollectibles were transferred to delinquent accounts.

17. A physical inventory of materials and supplies at April 30, 2011, showed a total of $19,100. Inventory is recorded using the purchases method in the General Fund; the consumption method is used at the government-wide level.

Required

1. Record in general journal form the effect of the above transactions on the General Fund and governmental activities for the year ended April 30, 2011. Do not record subsidiary ledger debits and credits.

2. Record in general journal form entries to close the budgetary and operating statement accounts. 3. Prepare a General Fund balance sheet as of April 30, 2011. 4. Prepare a statement of revenues, expenditures, and changes in fund balance for the year ended April 30, 2011. Do not prepare the government-wide financial statements. Town of Benton Problem 4-11 Permanent Fund and Related Special Revenue Fund Transactions https://www.hiqualitytutorials.com/product/acct-567-permanent-fund/ Annabelle Benton, great-granddaughter of the founder of the Town of Benton, made a cash contribution in the amount of $500,000 to be held as an endowment. To account for this endowment, the town has created the Alex Benton Park Endowment Fund. Under terms of the agreement, the town must invest and conserve the principal amount of the contribution in perpetuity. Earnings, measured on the accrual basis, must be used to maintain Alex Benton Park in an “attractive manner.” All changes in fair value are treated as adjustments of fund balance of the permanent fund and do not affect earnings. Earnings are transferred periodically to the Alex Benton Park Maintenance Fund, a special revenue fund. Information pertaining to transactions of the endowment and special revenue funds for the fiscal year ended June 30, 2011, follows: 1. The contribution of $500,000 was received and recorded on December 31, 2010.

2. On December 31, 2010, bonds having a face value of $400,000 were purchased for $406,300, plus three months of accrued interest of $6,000. A certificate of deposit with a face and fair value of $70,000 was also purchased on this date. The bonds mature on October 1, 2019 (105 months from date of purchase), and pay interest of 6 percent per annum semiannually on April 1 and October 1. The certificate of deposit pays interest of 4 percent per annum payable on March 31, June 30, September 30, and December 31.

3. On January 2, 2011, the town council approved a budget for the Alex Benton Park Maintenance Fund, which included estimated revenues of $13,400 and appropriations of $13,000.

4. On March 31, 2011, interest on the certificate of deposit was received by the endowment fund and transferred to the Alex Benton Park Maintenance Fund.

5. The April 1, 2011, bond interest was received by the endowment fund and transferred to the Alex Benton Park Maintenance Fund.

6. On June 30, 2011, interest on the certificate of deposit was received and transferred to the Alex Benton Park Maintenance Fund.

7. For the year ended June 30, 2011, maintenance expenditures from the Alex Benton Park Maintenance Fund amounted to $2,700 for materials and contractual services and $10,150 for wages and salaries. All expenditures were paid in cash except for $430 of vouchers payable as of June 30, 2011. Inventories of materials and supplies are deemed immaterial in amount.

8. On June 30, 2011, bonds with face value of $100,000 were sold for $102,000 plus accrued interest of $1,500. On the same date, 2,000 shares of ABC Corporation’s stock were purchased at $52 per share.

Required 1. Prepare in general journal form the entries required in the Alex Benton Park Endowment Fund to record the transactions occurring during the fiscal year ending June 30, 2011, including all appropriate adjusting and closing entries. (Note: Ignore related entries in the governmental activities journal at the government-wide level.)

2. Prepare in general journal form the entries required in the Alex Benton Park Maintenance Fund to record Transactions 1–8.

3. Prepare the following financial statements: (1) A balance sheet for both the Alex Benton Park Endowment Fund and the Alex Benton Park Maintenance Fund as of June 30, 2011. (2) A statement of revenues, expenditures, and changes in fund balance for both the Alex Benton Park Endowment Fund and the Alex Benton Park Maintenance Fund for the year ended June 30, 2011. City of Fordache General Capital Assets Problem 5-3 https://www.hiqualitytutorials.com/product/acct-567-general-capital/ General Capital Assets. Make all necessary entries in the appropriate governmental fund general journal and the government-wide governmental activities general journal for each of the following transactions entered into by the City of Fordache.

1. The city received a donation of land that is to be used by Parks and Recreation for a park. At the time of the donation, the land had a fair value of $5,200,000 and was recorded on the donor’s books at a historical cost of $4,500,000.

2. The Public Works Department sold machinery with a historical cost of $35,100 and accumulated depreciation of $28,700 for $6,400. The machinery had originally been purchased with special revenue funds.

3. A car was leased for the mayor’s use. Since the term of the lease exceeded 75 percent of the useful life of the car, the lease was capitalized. The first payment was $550 and the present value of the remaining lease payments was $30,000.

4. During the current year, a capital projects fund completed a new public safety building that was started in the prior year. The total cost of the project was $9,720,000. Financing for the project came from a $9,000,000 bond issue that was sold in the prior year, and from a $720,000 federal capital grant received in the current year. Current year expenditures for the project totaled $1,176,000. The full cost is attributed to the building since it was constructed on city-owned property.

5. Due to technological developments, the city determined that the service capacity of some of the technology equipment used by general government had been impaired. The calculated impairment loss due to technology obsolescence was $1,156,000. Capital Asset Disclosures Lynn County Problem 5–4 https://www.hiqualitytutorials.com/product/acct-capital-asset-disclosures/ Lynn County has prepared the following schedule related to its capital asset activity for the fiscal year 2011. Lynn County has governmental activities only, with no business-type activities. Required

1. Does the above capital asset footnote disclosure comply with the GASB requirements?

Explain. 2. Does the county use the modified approach to account for infrastructure assets? Explain. 3. What percentage of the useful life of the depreciable assets remains? Recording Capital Projects Fund Transactions - Erikus County Problem 5-7 https://www.hiqualitytutorials.com/product/acct-recording-capital-projects/ In Erikus County, the Parks and Recreation Department constructed a library in one of the county’s high growth areas. The construction was funded by a number of sources. Below is selected information related to the funding and closing of the Library Capital Project Fund. All activity related to the library construction occurred within the 2011 fiscal year.

1. The county issued $6,000,000, 4 percent bonds, with interest payable semiannually on June 30 and December 31. The bonds sold for 101 on July 30, 2010. Proceeds from the bonds were to be used for construction of the library, with all interest and premiums received to be used to service the debt issue. 2. A $650,000 federal grant was received to help finance construction of the library. 3. The Library Special Revenue Fund transferred $250,000 for use in construction of the library. 4. A construction contract was awarded in the amount of $6,800,000. 5. The library was completed on June 1, 2011, four months ahead of schedule. Total construction expenditures for the library amounted to $6,890,000. When the project was completed, the cost of the library was allocated as follows: $200,000 to land, $6,295,000 to building, and the remainder to equipment.

6. The capital projects fund was closed. It was determined that remaining funds were related to the bond issue, and thus they were appropriately transferred to the debt service fund.

Required

Make all necessary entries in the capital projects fund general journal and the governmental activities general journal at the government-wide level. Statement of Revenues, Expenditures, and Changes in Fund Balance - Annette County Problem 5-8 https://www.hiqualitytutorials.com/product/acct-567-statement-revenues/ The pre-closing trial balance for the Annette County Public Works Capital Project Fund is provided below. Required

1. Prepare the June 30, 2011, statement of revenues, expenditures, and changes in fund balance for the capital projects fund.

2. Has the capital project been completed? Explain your answer. Budgetary Transactions - Fleck County Problem 6–4 https://www.hiqualitytutorials.com/product/acct-567-budgetary-transactions/ Fleck County issued $5,500,000, 3 percent serial bonds, paying interest on January 1 and July 1. The bonds were sold on June 1 for 101. The county is required to use all accrued interest and premiums to service the debt. Any additional resources needed to service the debt are to come from the General Fund. The county’s fiscal year-end is December 31. Required Prepare in general journal form the budgetary entry the debt service fund would make to account for this serial bond issue. What, if any, adjustment would need to be made to the General Fund budget to account for this serial bond issue? Statement of Legal Debt Margin - City of Appleton Problem 6-5 https://www.hiqualitytutorials.com/product/acct-legal-debt-margin/ In preparation for a proposed bond sale, the city manager of the City of Appleton requested that you prepare a statement of legal debt margin for the city as of December 31, 2010. You ascertain that the following bond issues are outstanding on that date: You obtain other information that includes the following items: 1. Assessed valuation of real and taxable personal property in the city totaled $240,000,000. 2. The rate of debt limitation applicable to the City of Appleton was 8 percent of total real and taxable personal property valuation.

3. Electric utility, water utility, and transit authority bonds were all serviced by enterprise revenues, but each carries a full-faith-and-credit contingency provision. By law, such self-supporting debt is not subject to debt limitation. 4. The convention center bonds and tax increment bonds are subject to debt limitation. 5. The amount of assets segregated for debt retirement at December 31, 2010, is $1,800,000. Serial Bond Debt Service Fund Journal Entries and Financial Statements - New Town Problem 6-8 https://www.hiqualitytutorials.com/product/acct-serial-bond-debt/ As of December 31, 2010, New Town had $9,500,000 in 4.5 percent serial bonds outstanding. Cash of $509,000 is the debt service fund’s only asset as of December 31, 2010, and there are no liabilities. The serial bonds pay interest semiannually on January 1 and July 1, with $500,000 in bonds being retired on each interest payment date. Resources for payment of interest are transferred from the General Fund and the debt service fund levies property taxes in an amount sufficient to cover principal payments. Required

1. Prepare debt service fund and government-wide entries in general journal form to reflect, as necessary, the following information and transactions for FY 2011. (1) The operating budget for FY 2011 consists of estimated revenues of $1,020,000 and estimated other financing sources equal to the amount of interest to be paid in FY 2011. Appropriations must be provided for interest payments and bond redemptions on January 1 and July 1. (2) Cash was received from the General Fund and checks were written and mailed for the January 1 principal and interest payments. (3) Property taxes in the amount of $1,020,000 were levied (no estimate for uncollectible accounts has been made). (4) Property taxes in the amount of $1,019,000 were collected. (5) Cash was received from the General Fund and checks were written and mailed for the July 1 principal and interest payments. (6) Adjusting entries were made and uncollected taxes receivable were reclassified as delinquent. At the fund level, entries were also made to close budgetary and operating statement accounts. (Ignore closing entries in the government activities journal.)

1. Prepare a statement of revenues, expenditures, and changes in fund balances for the debt service fund for the year ended December 31, 2011.

2. Prepare a balance sheet for the debt service fund as of December 31, 2011. Central Duplicating Internal Service Fund Town of Fredericksburg Problem 7-3 https://www.hiqualitytutorials.com/product/acct-central-duplicating-internal/ As of September 30, 2010, the Central Duplicating Fund of the Town of Fredericksburg had the following post-closing trial balance: During the fiscal year ended September 30, 2011, the following transactions (summarized) occurred:

1. Employees were paid $290,000 wages in cash; additional wages of $43,500 were withheld for federal income and social security taxes. The employer’s share of social security taxes amounted to $23,375.

2. Cash remitted to the federal government during the year for withholding taxes and social security taxes amounted to $65,500.

3. Utility bills received from the Town of Fredericksburg’s Utility Fund during the year amounted to $23,500. 4. Office expenses paid in cash during the year amounted to $10,500. 5. Service supplies purchased on account during the year totaled $157,500. 6. Parts and supplies used during the year totaled $152,300 (at cost). 7. Charges to departments during the fiscal year were as follows: 1. Unpaid balances at year-end were as follows: 1. Payments to the Utility Fund totaled $21,800. 2. Accounts Payable at year-end amounted to $13,250. 3. Annual depreciation rate for machinery and equipment is 10 percent. 4. Revenue and expense accounts for the year were closed.

Required 1. Prepare a statement of revenues, expenses, and changes in net assets for the year. 2. Comment on the evident success of the pricing policy of this fund, assuming that user charges are intended to cover all operating expenses, including depreciation, but are not expected to provide a net income in excess of 3 percent of billings to departments.

3. Prepare a statement of net assets for the Central Duplicating Fund as of September 30, 2011.

4. Prepare a statement of cash flows for the Central Duplicating Fund for the year ended

September 30, 2011. Enterprise Fund Journal Entries and Financial Statements - City of Bay Lake Problem 7-8 https://www.hiqualitytutorials.com/product/acct-enterprise-fund-journal/ Following is the June 30, 2010, statement of net assets for the City of Bay Lake Water Utility Fund. Required

1. For fiscal year 2011, prepare general journal entries for the Water Utility Fund using the following information. (1) The amount in the Accrued Utility Revenue account was reversed. (2) Billings to customers for water usage during fiscal year 2011 totaled $2,982,557; $193,866 of the total was billed to the General Fund. (3) Cash in the amount of $260,000 was received. The cash was for interest earned on investments and $82,000 in accrued interest. (4) Expenses accrued for the period were: management and administration, $360,408; maintenance and distribution, $689,103; and treatment plant, $695,237. (5) Cash receipts for customer deposits totaled $2,427. (6) Cash collections on customer accounts totaled $2,943,401, of which $209,531 was from the General Fund. (7) Cash payments for the period were as follows: Accounts Payable, $1,462,596; interest (which includes the accrued interest payable), $395,917; bond principal, $400,000; machinery and equipment, $583,425; and return of customer deposits, $912. (8) A state grant amounting to $475,000 was received to help pay for new water treatment equipment. (9) Accounts written off as uncollectible totaled $10,013. (10) The utility fund transferred $800,000 in excess operating income to the General Fund. (11) Adjusting entries for the period were recorded as follows: depreciation on buildings was $240,053 and on machinery and equipment it was $360,079; the allowance for uncollectible accounts was increased by $14,913; an accrual for unbilled customer receivables was made for $700,000; accrued interest income was $15,849; and accrued interest expense was $61,406. (12) The Revenue Bond Payable account was adjusted by $400,000 to record the current portion of the bond. (13) Closing entries and necessary adjustments were made to the net asset accounts.

1. Prepare a statement of revenues, expenses, and changes in fund net assets for the Water

Utility Fund for the year ended June 30, 2011. 2. Prepare a statement of net assets for the Water Utility Fund as of June 30, 2011. 3. Prepare a statement of cash flows for the Water Utility Fund as of June 30, 2011. Internet Case CalPERS - Case 8-1 https://www.hiqualitytutorials.com/product/acct-567-calpers-case/ While the examples in this chapter have focused on a single-employer plan, many states operate statewide plans, referred to as Public Employee Retirement Systems (PERS), to which multiple employers contribute. One of the largest PERS plans in the nation is operated in the State of California. Required

To answer the following questions use the Web site found at www.calpers.ca.gov. The answers to the questions can be found in CalPERS’s annual report or in the general information section provided on the site. 1. When was CalPERS established? 2. What types of employers contribute to CalPERS? 3. How many individuals are served by CalPERS? 4. How many and what types of funds are administered by CalPERS? 5. For the most recent reporting period, what is the value of total fiduciary assets? 6. For the most recent reporting period, what was the change in pension fund net assets? 7. What are the funded ratios from the schedule of funding progress and what do the funded ratios tell you?

8. What is the reporting relationship between CalPERS and the State of California Tax Agency Fund - Lincoln County Problem 8-4 https://www.hiqualitytutorials.com/product/acct-567-tax-agency/ The county collector of Lincoln County is responsible for collecting all property taxes levied by funds and governments within the boundaries of the county. To reimburse the county for estimated administrative expenses of operating the tax agency fund, the agency fund deducts 1 percent from the collections for the town, the school district, and the townships. The total amount deducted is added to the collections for the county and remitted to the Lincoln County General Fund. The following events occurred in 2011: 1. Current-year tax levies to be collected by the agency fund were: 2. $8,400,000 of current taxes was collected during the first half of 2011. 3. Liabilities to all funds and governments as the result of the first half-year collections were recorded. (A schedule of amounts collected for each participant, showing the amount withheld for the county General Fund and net amounts due the participants, is recommended for determining amounts to be recorded for this transaction.)

4. All money in the tax agency fund was distributed. Required

1. Make journal entries for each of the foregoing transactions that affected the tax agency fund.

2. Make journal entries for each of the foregoing transactions that affected the Lincoln County General Fund. Begin with the tax levy entry, assuming 3 percent of the gross levy will be uncollectible.

3. Make journal entries for each of the foregoing entries that affected the Town of Smithton General Fund. Begin with the tax levy entry, assuming 3 percent of the gross levy will be uncollectible.

4. Which financial statements would be prepared by the tax agency fund? Pension Plan Calculation - The Village of Dover Problem 8-8 https://www.hiqualitytutorials.com/product/acct-pension-plan-calculation/ The Village of Dover administers a defined benefit pension plan for its police and fire personnel. Employees are not required to contribute to the plan. The village received from the actuary and other sources the following information about the Public Safety Employees’ Pension Fund as of December 31, 2011. Required

Assuming that the Village of Dover contributes $385,000 cash to the plan on December 31, 2011, calculate the employer’s 1. Annual pension cost. 2. Net pension obligation, as of December 31, 2011. Pension Plan Financial Statements - State of Nodak Problem 8-9 https://www.hiqualitytutorials.com/product/acct-pension-plan-financial/ The State of Nodak operates a Public Employees Retirement System (PERS) for all employees of the state. The pre-closing trial balance of the PERS as of June 30, 2011, follows (in thousands of dollars): Required

1. Prepare a statement of changes in plan net assets for the State of Nodak Public Employees Retirement System for the year ended June 30, 2011, in as much detail as possible.

2. Prepare a statement of plan net assets as of June 30, 2011, for the State of Nodak Public Employees Retirement System.

3. Explain how the State of Nodak (the employer) would report its participation in the state PERS at the fund level and at the government-wide level. Comprehensive Set of Transactions - City of Lynnwood Problem 9-4 https://www.hiqualitytutorials.com/product/acct-comprehensive-set-transactions/ The City of Lynnwood was recently incorporated and had the following transactions for the fiscal year ended December 31, 2011.

1. The city council adopted a General Fund budget for the fiscal year. Revenues were estimated at $2,000,000 and appropriations were $1,990,000.

2. Property taxes in the amount of $1,940,000 were levied. It is estimated that $9,000 of the taxes levied will be uncollectible.

3. A General Fund transfer of $25,000 in cash and $300,000 in equipment (with accumulated depreciation of $65,000) was made to establish a central duplicating internal service fund.

4. A citizen of Lynnwood donated marketable securities with a fair value of $800,000. The donated resources are to be maintained in perpetuity with the city using the revenue generated by the donation to finance an after school program for children, which is sponsored by the parks and recreation function. Revenue earned and received as of December 31, 2011, was $40,000…. Government-wide Financial Statements - Town of Freaz Problem 9-9 https://www.hiqualitytutorials.com/product/acct-567-government-wide/ Following is the governmental activities pre-closing trial balance for the Town of Freaz. Freaz is a relatively small town and, as a result, it has only governmental funds (i. e., it uses no proprietary funds). There are no component units. To complete the financial statements for its annual report, the town must prepare a government-wide statement of net assets and a statement of activities. Required Using the trial balance provided by the town, prepare a government-wide statement of activities and a statement of net assets. Restricted net assets for debt service increased $87 (000s omitted) for the period. Converting from Modified Accrual to Accrual Accounting - Village of Rodale Problem 9-10 https://www.hiqualitytutorials.com/product/acct-converting-modified-accrual/

The Village of Rodale keeps its governmental fund accounting records on a modified accrual basis. At the end of the fiscal year, the village accountant must convert the modified accrual information to accrual information to allow for preparation of the government-wide financial statements. Following are several transactions identified by the accountant that will require conversion.

1. At the end of the year, depreciation expense of $674,300 was recorded on buildings and equipment. 2. Year-end salaries amounting to $39,123 were accrued. 3. During the year the village acquired a vehicle at a cost of $21,369 and depreciable office equipment at a cost of $7,680. (Note: the village uses a Buildings and Equipment account.)

4. The village made the final $50,000 payment on a long-term loan. Interest related to the loan was $2,250, half of which had been accrued at the end of the prior fiscal year.

5. The records indicate that the Due from Other Funds balance is $720. Of this amount, $480 is due from the Water Utility Fund for service provided by the general government; the remainder is due from a special revenue fund for services provided by the Police Department. The amount Due to Other Funds balance is $950, which the General Fund owes to the Water Utility Fund for water received. Required Prepare modified accrual to accrual adjustments for all of the transactions identified in Items 1– 5. Your answer sheet should be organized as follows. In the first column, identify the account titles that will be affected by the adjustment. Use the second column to identify whether the account title provided is a modified accrual account or an accrual account. The adjustment columns should record the amount of the debit or credit that would need to be made to adjust information from modified accrual to accrual. Keep in mind that some transactions may not be recorded under modified accrual; in such cases, the debit and credit adjustments affect only accrual accounts since the adjustments are reflected at the government-wide level only. Single Audit - Internet Case Problem 12-4 https://www.hiqualitytutorials.com/product/acct-567-single-audit/ Single Audit, Internet Case. A not-for-profit organization has hired you to conduct an audit. The audit has been requested by the organization’s board of directors. A mission of the organization is to provide for the education of children in the economically distressed area of the city. In fulfilling its mission, the organization operates a Head Start program, a K-3 elementary school, and an after-school kids program. To help fund its mission, the organization receives funds from several sources, including federal programs. The federal programs and the amount of funding expended from each program for the fiscal year are as follows: Required It may be helpful to use the Catalog of Federal Domestic Assistance (CFDA) Web site (www.cfda.gov) and the OMB Circular A–133 Compliance Supplement (www.whitehouse.gov/OMB/circulars) to answer the following questions. 1. What federal departments are sponsoring the programs listed? 2. OMB allows “cluster programs” to be considered as a single program when conducting the risk-based approach to selecting programs for audits under the single audit. Of the programs listed, which (if any) are part of the same cluster?

3. Based on size alone, are there any Type A programs or other programs that would be exempt from audit under the risk-based approach?

4. Based on size alone, which programs would you select for audit and why? 5. If the not-for-profit has received an unqualified opinion in each of the last two years and the Head Start program was selected for audit in both years, would the programs you select for audit change? If not, why not? If so, what programs would you select and why?

6. Reading the objectives of the programs identified, you will notice a common underlying objective. Since the ability to obtain funds depends on meeting this underlying objective, it should be considered a major compliance issue for the auditor. What is the objective? What compliance item is particularly affected by this underlying objective? Terms of Gift Classification of Revenues/Support and Expenses Problem 14-2 https://www.hiqualitytutorials.com/product/acct-terms-gift-classification/ For each of the independent transactions listed in the left-hand column below, indicate which of the revenue/support or expense classifications apply by choosing one or more of the letters from the listed items in the right-hand column. Choose all that apply. 1. A museum gift shop sold prints of famous paintings 2. An NPO incurred a cost for its annual financial statement audit 3. A registered nurse volunteered 10 hours a week for a local agency for disabled person. 4. ......... Joint Activities with a Fund-Raising Appeal Problem 14-4 https://www.hiqualitytutorials.com/product/acct-567-joint-activities/ Consider the following scenarios relating to activities that include a fund-raising appeal:

1. The Green Group’s mission is to protect the environment by increasing the portion of waste recycled by the public. The group conducts a door-to-door canvass of communities that recycle a low portion of their waste. The canvassers share their knowledge about the environmental problems caused by not recycling with households, asking them to change their recycling habits. The canvassers also ask for charitable contributions to continue this work, although these canvassers have not participated in fund-raising activities before.

2. Central University’s mission is to educate students in various academic pursuits. The political science department holds a special lecture series in which prominent world leaders speak about current events. Admission is priced at $250, which is above the $50 fair value of other lectures on campus, resulting in a $200 contribution. Invitations are sent to previous attendees and donors who have contributed significant amounts in the past.

3. The mission of Kid’s Camp is to provide summer camps for economically disadvantaged youths. It conducts a door-to-door solicitation campaign for its camp programs by sending volunteers to homes in upper-class neighborhoods. The volunteers explain the camp’s programs and distribute leaflets explaining the organization’s mission. Solicitors say, “Although your own children most likely are not eligible to attend this camp, we ask for your financial support so that children less fortunate can have this summer camp experience.” Required Determine for each scenario whether its purpose, audience, and content meet the criteria described in this chapter and Chapter 13 of the AICPA, Audit and Accounting Guide, Not-For- Profit Organizations so that the joint costs can be allocated between programs and support expenses. Explain your reasons. Identify Departures from GAAP-Central Area Disadvantaged Youth Center Problem 14–5

https://www.hiqualitytutorials.com/product/acct-567-identify-departures/ The balance sheet and statement of activities for the Central Area Disadvantaged Youth Center for fiscal year 2011, prepared by a volunteer accountant with business experience, are presented on the following page. Required

1. Assume that you are the independent auditor performing a financial statement audit of the center. Identify and make a list of your concerns based on your review of the center’s financial statements. Would you feel comfortable issuing an unqualified (i.e., “clean”) opinion on the Central Area Disadvantaged Youth Center’s financial statements?

2. What actions would you require of the center’s management to address your concerns before you would be willing to perform this audit? What would be your recourse if the center refused to take the recommended actions? (You may wish to refer to Chapter 12 in forming your answer to these questions.)

3. As the independent auditor, you would not be able to issue an unqualified opinion on these financial statements. The statements appear to be… Statement of Activities - Atkins Museum Problem 14–6 https://www.hiqualitytutorials.com/product/acct-567-statement-activities/ The Atkins Museum recently hired a new controller. His experience with managerial accounting and strong communication skills were extremely attractive. The new controller sent each member of the Board of Trustees’ Finance Committee a set of the monthly financial statements one week before the monthly meeting for their review. The set included the following statement of activities. Other information: The management and general expenses are first allocated to the programs to which they directly relate; for example, the executive director’s salary is allocated to the Public Exhibit Program according to the percentage of time spent working on the program. Remaining unallocated management and general expenses are allocated to the programs as indirect costs based on the relative amount of salaries and wages to total salaries and wages for the programs. Required As a member of The Atkins Museum’s Board of Directors Finance Committee, review this statement and answer the following questions: 1. Is the statement in proper form according to SFAS No. 117? 2. What questions do you have for the controller? 3. The Atkins Museum would like to open an Impressionists exhibit. If its operating expenses are expected to be similar to that of the Abstract Exhibit, how much should the organization solicit in contributions or grants to cover the full cost of the program? 4. If you were a potential contributor to the Atkins Museum, do you think you have enough information from this statement on which to base your decision to donate? 5. No. The presented statement is not in proper form for a statement of activities. This statement has one of the same… Notes on Net Assets Kids Clubs of America Problem 14-7 https://www.hiqualitytutorials.com/product/acct-notes-net-assets/ The following items are taken from the financial statements of the Kids Clubs of America for the years ending December 31, 2011, and 2010, with related notes. Required

1. Explain what the term board-designated, unrestricted net assets means. What does the board plan to do with these net assets? Can board members change their minds in future years?

2. Describe the types of restrictions that donors have placed on net assets. How much of those gifts are restricted for a period of time as opposed to purpose?

3. If an unexpected need arises, can the board of directors decide to spend donor-restricted funds in ways other than the donor indicated when the contribution was made? Prepare Financial Statements - Children’s Counseling Center Problem 14-8 https://www.hiqualitytutorials.com/product/acct-prepare-financial-statements/ The Children’s Counseling Center was incorporated as a not-for-profit voluntary health and welfare organization 10 years ago. Its adjusted trial balance as of June 30, 2011, follows.

1. Salaries and fringe benefits were allocated to program services and supporting services in the following percentages: counseling services, 40%; professional training, 15%; community service, 10%; management and general, 25%; and fund-raising, 10%. Occupancy and utility, supplies, printing and publishing, and telephone and postage expense were allocated to the programs in the same manner as salaries and fringe benefits. Depreciation expense was divided equally among all five functional expense categories. Unrealized loss on investments was charged to the management and general function.

2. The organization had $153,314 of cash on hand at the beginning of the year. During the year, the center received cash from contributors: $310,800 that was unrestricted and $48,100 that was restricted for the purchase of equipment for the center. It had $9,200 of income earned and received on long-term investments. The center spent cash of $286,410 on salaries….Required

3. Prepare a statement of financial position as of June 30, 2011, following the format in Illustration 14–7.

4. Prepare a statement of functional expenses for the year ended June 30, 2011, following the format in Illustration 14–10.

5. Prepare a statement of activities for the year ended June 30, 2011, following the format in Illustration 14–8.

6. Prepare a statement of cash flows for the year ended June 30, 2011, following the format in Illustration 14–9. Audit Risk - CitCo Case 12–1 https://www.hiqualitytutorials.com/product/acct-567-audit-risk/ Your firm recently signed a letter of engagement to audit CitCo, the local city and county government. Over your morning cup of coffee, you open the local newspaper and read the following: Police are investigating how two computer servers belonging to CitCo ended up next to the commercial trash compactor of a local restaurant. The servers’ property tags helped police trace them to the CitCo tax collector’s office. Bob Bogus, director of the tax collector’s office, said that his office had recently relinquished the servers to the property management office because the tax collector’s office had purchased new servers. Ima Teller, spokesperson for the property management office, was unable to confirm whether her office had received the computer servers. It is unknown what data, such as citizen tax records and social security numbers, were on the servers at the time they were found, or whether another CitCo office was using the servers at the time of the theft. A spokesperson for the Chief Financial Officer indicated that office policy is to

erase confidential data from the drives before relinquishing or disposing of servers. The investigation is ongoing. Required Discuss how the above information would affect the assessment and work your office does on the audit for CitCo. Include in your discussion any special considerations that may result if the audit is conducted under GAGAS.

1. Management assertions, particularly with regard to internal control procedures for data systems security and capital asset management procedures.

2. Risk assessment – it would appear that the… Single Audit - Mountain Lake Mental Health Affiliates Case 12-2 https://www.hiqualitytutorials.com/product/acct-single-audit-case/ Background. Mountain Lake Mental Health Affiliates, a nongovernmental not-for-profit organization, has contacted Bill Wise, CPA, about conducting an annual audit for its first year of operations. The governing board wishes to obtain an audit of the financial statements and, having received favorable information about Mr. Wise’s ability to conduct such audits, has decided not to issue a request for proposals from other audit firms. Cybil Civic, president of the board, heard from a friend associated with a similar organization that $5,000 is an appropriate price for such an audit and has offered Mr. Wise the audit for that price. Although Mr. Wise agrees that $5,000 would be reasonable for a typical financial statement audit of an organization of Mountain Lake’s type and size, he refuses to contract for the audit at that price until he is able to estimate the extent of audit work that would be involved. Facts. In discussions with Mountain Lake’s controller, Mr. Wise obtains the following information about the organization for the year just ended:

1. Mountain Lake received a $200,000 grant from the City of Mountain Lake, of which 50 percent was stated as being from federal sources. Of this amount, $150,000 was expended during the year, equally from federal and nonfederal sources.

2. Unrestricted gifts of $50,000 were received from private donors; $40,000 was spent during the year.

3. The organization received $300,000 from Medicare for mental health services rendered during the year.

4. A building owned by the U.S. Department of Health and Human Services is occupied by Mountain Lake for rent of $1 per year. The fair value of the rental has been appraised at $30,001.

5. Mountain Lake carried out a program with the Federal Bureau of Prisons to provide alcohol and drug abuse counseling services for prisoners at a nearby federal prison. Services are provided on a “units of service” reimbursement basis. Each unit of service is reimbursed at the rate of $100 and the contract provides for maximum reimbursement of $400,000. Actual units of service for the year were 4,400. Direct costs incurred for these services amounted to $250,000 in total.

Required 1. Based on the foregoing facts, is Mountain Lake Mental Health Affiliates required to have a single audit? Explain your answer. 2. Should Mr. Wise accept the audit engagement for a $5,000 fee? Why or why not? 3. Would Mr. Wise be considered independent according to Government Auditing

Standards if he also prepares routine tax filings for the organization? Why or why not?

(Note: The authors are indebted to James Brown, a partner with BKD, LLP in Springfield, Missouri, for providing the example on which Case 12–2 is based.) This case highlights two issues: (1) determining whether an organization has expended sufficient federal awards to require either a single audit or program-specific audit (not always an easy task); and (2) the auditor’s…. Internet Case - City of Belleview Case 12–5 https://www.hiqualitytutorials.com/product/acct-567-internet-case/ The City of Belleview receives pass-through funds from the state’s Department of Housing to assist in administering the federally funded Supportive Housing Program for the elderly. At the request of the state’s Department of Housing, the city has engaged you to perform a programspecific audit of its expenditures of federal awards for the Supportive Housing Program for the elderly. Although you are unfamiliar with the particular program, you have extensive experience in governmental auditing and have audited many other federal programs. Required Utilize the Internet to answer the following questions about this program.

1. What is the Catalog of Federal Domestic Assistance (CFDA) number for this program?

(Note: The relevant Web site is 2. Describe the program’s purpose and its eligible beneficiaries. 3. Which of the 14 compliance items (A through N) listed in the Circular A–133 Compliance Supplement are applicable to auditing compliance for this program? (Hint: Access Parts, 2, 3, and 4 of the Compliance Supplement at

1. The Catalog of Federal Domestic Assistance (CFDA) number for this program is readily determinable from the… Single Audit Quality - National Single Audit Sampling Case 12–6 https://www.hiqualitytutorials.com/product/acct-single-audit-quality/ In this chapter, information was provided on the report of the National Single Audit Sampling project. The project was the outgrowth of concern over the quality of single audits. Based on the project’s results, it would appear that there is reason for concern over the quality of audits, given that 35.5 percent of the audits were considered unacceptable. The most commonly cited problems were: 1. Failure to document an understanding of internal controls over compliance requirements. 2. Failure to document testing of internal controls on at least some compliance requirements. 3. Failure to document compliance testing on at least some compliance requirements.

Required 1. Discuss factors you believe may be contributing to the problems related to single audit quality.

2. The project report recommends that all affected parties be involved in the solution. Discuss how you think each of the following three parties could help improve single audit quality. (1) The Office of Management and Budget (OMB). (2) The auditee. (3) The audit profession. There are many ideas that can be provided on why there are problems with the quality of the single audit. Problems with single audit quality have been ongoing. Some ideas meriting discussion include:

� The complexity of the single audit. Auditor unfamiliarity with… Audit Committees - Laurel City Case 12–7 https://www.hiqualitytutorials.com/product/acct-567-audit-committees/ The city council members of Laurel City are considering establishing an audit committee as a subset of the council. Several members work for commercial businesses that have recently established such committees in response to the Sarbanes-Oxley Act of 2002. They have asked your advice as a partner in the public accounting firm that audits the city’s annual financial statements. They are especially interested in whether the benefits of such a committee outweigh any costs to establishing one. Required

1. What resources are available to the city to help it use this audit committee efficiently and effectively?

2. Provide a short report to the council that lists the benefits and costs of establishing an audit committee. Explain what qualifications would be expected of council members who sit on this committee and the tasks in which they would be engaged. Sarbanes-Oxley Act of 2002 brought attention to audit committees, although many organizations have charged subsets of the Board or Council with specific duties relating to the audit and auditors.

1. There are many resources, workshops, articles and books on the topic of audit… Temporarily Restricted Net Assets - Baytown Rehabilitative Camp Case 14–1 https://www.hiqualitytutorials.com/product/acct-temporarily-restricted-net/ For several years, Baytown Rehabilitative Camp for Disabled Children (hereafter referred to as the camp) has applied for an operating grant from the Baytown Area United Way. As the finance adviser for the local United Way allocation panel, it is your responsibility to evaluate the camp’s budget request for the forthcoming year and its audited financial statements. The camp’s most recent comparative statement of financial position and statement of activities are presented below. Additional Information: As reflected in the camp’s 2011 statement of activities, the United Way agency allocated $25,000 to the camp for fiscal year 2011. However, the amount allocated was $5,000 less than the camp had requested in its fiscal year 2011 budget, reflecting the allocation panel’s concern about the camp’s inadequate financial reserves and low ratio of program services expense to total expense (only 57 percent in 2010). As a condition for receiving the $25,000 fiscal year 2011 allocation, Baytown Rehabilitative Camp agreed to take actions to improve its financial reserves and its ratio of program services expense to total expense, including an increase in its fund-raising efforts and a reduction in its support payroll. Another area of concern to the allocation panel has been the camp’s long delay in using a restricted contribution of $100,000 received several years earlier. This gift was restricted by the donor for future expansion of a building used as a dining hall and for rehabilitative activities. This contribution has been invested in CDs and has grown to $122,368 as of December 31, 2010. The camp is requesting a $35,000 United Way allocation for fiscal year 2012, based on a growing demand for its services and improvement made in its financial condition. As financial adviser for the local United Way allocation panel, however, you note that much of the improvement in unrestricted net assets resulted from $37,500 of temporarily restricted net assets that were released from restriction during fiscal year 2011, with no corresponding increase in the balance of the Buildings and Building Improvements account. (Note: $20,000 of the $57,500

released from restriction related to $20,000 of temporarily restricted contributions received during 2011.) You immediately contact the camp administrator for an explanation, whereupon she explains that the board of directors voted to use $37,500 of previously restricted investments for operating purposes after the administrator reported to the board that the original agreement with the donor could not be located and the donor was now deceased. She further indicated that the board may continue to use this pool of resources to further improve the camp’s financial condition. Required

1. As financial adviser, evaluate the camp’s statement of financial position and statement of activities and prepare a report for the chair of the allocation committee indicating the extent to which the camp’s financial situation has improved or worsened. You should base your recommendation on measures such as the current ratio and ratio of unrestricted net assets, net of total property, plant, and equipment, to total expenses for the year. In your analysis you should look at the camp’s unrestricted financial position, both including and excluding the questionable use of the $37,500 of restricted net assets for operating purposes.

2. Has the camp’s board of directors violated the terms of the $100,000 contribution that was restricted by the donor for future building expansion? What sanctions might be taken against the board and the camp administrator for not meeting their fiduciary responsibilities?

3. What amount of United Way funds would you recommend be allocated to the camp for fiscal year 2012? Explain your recommendation. Re: Analysis of Baytown Rehabilitative Camp for Disabled Children’s financial condition and recommendations for FY 2012 funding As you and the members of the panel may recall, we were quite concerned… Private College Transactions - Elizabeth College Problem 16-3 https://www.hiqualitytutorials.com/product/acct-private-college-transactions/ Elizabeth College, a small private college, had the following transactions in fiscal year 2011.

1. Billings for tuition and fees totaled $5,600,000. Tuition waivers and scholarships of $61,500 were granted. Students received tuition refunds of $101,670.

2. During the year the college received $1,891,000 cash in unrestricted private gifts, $575,200 cash in temporarily restricted grants, and $1,000,000 in securities for an endowment.

3. A pledge campaign generated $626,000 in unrestricted pledges, payable in fiscal year

2012. 4. Auxiliary enterprises provided goods and services that generated $94,370 in cash. 5. Collections of tuition receivable totaled $5,380,000. 6. Unrestricted cash of $1,000,000 was invested. 7. The college purchased computer equipment at a cost of $10,580. 8. During the year the following expenses were paid: 1. Instruction provided $450,000 in services related to the temporarily restricted grant recorded in transaction 2. 2. At year-end, the allowance for uncollectible tuition and fees was increased by $7,200.

The fair value of investments had increased … Required

1. Prepare journal entries in good form to record the foregoing transactions for the fiscal year ended June 30, 2011.

2. Prepare a statement of activities for the year ended June 30, 2011. Assume beginning net asset amounts of $7,518,000 unrestricted, $200,000 temporarily restricted, and $5,000,000 permanently restricted. Public University Transactions - Green Tree State University Problem 16-4 https://www.hiqualitytutorials.com/product/acct-public-university-transactions/ The Statement of Net Assets of Green Tree State University, a governmentally owned university, as of the end of its fiscal year June 30, 2010, follows. The following information pertains to the year ended June 30, 2011:

1. Cash collected from students’ tuition totaled $3,000,000. Of this $3,000,000, $362,000 represented accounts receivable outstanding at June 30, 2010; $2,500,000 was for current-year tuition; and $138,000 was for tuition applicable to the semester beginning in August 2011. 2. Deferred revenue at June 30, 2010, was earned during the year ended June 30, 2011. 3. Notification was received from the federal government that up to $50,000 in funds could be received in the current year for costs incurred in developing student performance measures.

4. During the year, the University received an unrestricted appropriation of $60,000 from the state.

5. Equipment for the student computer labs was purchased for cash in the amount of $225,000.

6. During the year, $200,000 in cash contributions was received from alumni. The contributions are to be used for construction of a new library. 7. Interest expense on the bonds payable in the amount of $48,000 was paid. 8. During the year, investments with a carrying value of $25,000 were sold for $31,000. Investments were purchased at a cost of $40,000. Investment income of $18,000 was earned and collected during the year.

9. General expenses of $2,500,000 related to the administration and operation of academic programs, and research expenses of $37,000 related to the development of student performance measures were recorded in the voucher system. At June 30, 2011, the accounts payable balance was $75,000. 10. Accrued liabilities at June 30, 2010, were paid. 11. At year-end, adjusting entries were made. Depreciation on capital assets totaled $90,000. Accrued interest on investments was $1,250. The fair value of investments at year-end was $262,000. The Allowance for Doubtful Accounts was adjusted to $17,000. 12. Nominal accounts were closed and net asset amounts were reclassified as necessary.

Required 1. Prepare journal entries in good form to record the foregoing transactions for the year ended June 30, 2011.

2. Prepare a statement of net assets for the year ended June 30, 2011. Various Unrelated Transactions Problem 16–5 https://www.hiqualitytutorials.com/product/acct-various-unrelated-transactions/ Following are several unrelated transactions involving a university.

1. In fiscal year 2011, the university was notified by the federal government that in 2012 it would receive a $500,000 grant for wetlands research.

2. The university received $234,000 in contributed services from nurses providing services in its community outreach clinics. The services were part of the regular operation of the clinics.

3. During the year, the university constructed a new street, to allow for the expansion of its student housing efforts. The cost of the street was $1,980,000.

4. The university extended $325,000 in loans to students. During the year, $196,000 in loans was collected, along with $2,450 in interest.

5. At year-end, the Allowance for Doubtful Accounts was increased by $1,670. Required

1. Prepare journal entries to record the foregoing transactions, assuming the university is a private institution.

2. Prepare journal entries to record the foregoing transactions, assuming the university is a public institution.

PRIVATE UNIVERSITY Debits Credits

1. GRANT RECEIVABLE 500,000 CONTRIBUTIONS—TEMPORARILY

RESTRICTED 500,000

1. PROGRAM EXPENSES 234,000 CONTRIBUTIONS—UNRESTRICTED 234,000

1. LAND IMPROVEMENTS …. Financial Statements Private University - Horton University Problem 16–6 https://www.hiqualitytutorials.com/product/acct-financial-statements-private/ The following is the pre-closing trial balance for Horton University as of June 30, 2011. Additional information related to net assets and the statement of cash flows is also provided. Additional information Net assets released from temporary restrictions totaled $26,850. There were no restrictions on the investment income earned. Twenty percent of the unrealized gain is related to permanently restricted net assets and 10 percent is related to temporarily restricted net assets, with the remainder related to unrestricted net assets. The differences between the beginning and ending balances were as follows: Tuition and Fees Receivable increased by $10,230. Pledges Receivable decreased by $1,560. Allowance for Doubtful Accounts was increased by $770 (the bad debt was netted against Tuition and Fees). Accounts Payable decreased by $2,900. Accrued Liabilities decreased by $1,120. Deferred Revenue increased by $6,200. Depreciation Expense was $30,070. Cash of $100,000 was used to retire bonds. Investments were sold for $1,500,000 and others were purchased for $1,250,000. Required 1. Prepare a statement of activities for the year ended June 30, 2011. 2. Prepare a statement of financial position for June 30, 2011. 3. Prepare a statement of cash flows for the year ended June 30, 2011.

Preview 16-6. a.

HORTON UNIVERSITY

STATEMENT OF ACTIVITIES

YEAR ENDED JUNE 30, 2011

Temporarily

Permanently

Unrestricted

Restricted

Restricted

Total

Revenues and gains: Student tuition and fees (net)*

$ 192,750

$ 192,750

Contributions

310,200

$ 77,000

387,200

Grants and contracts

324,000

121,800

445,800

Investment income

11,500

11,500

Auxiliary enterprise sales and services

53,560

53,560

…..

Financial Statements Public College - Sherlock State College Problem 16–7

https://www.hiqualitytutorials.com/product/acct-public-college-financial/

The following balances come from the trial balance of Sherlock State College as of the end of

the 2011 fiscal year.

Required

1. Prepare a statement of revenues, expenses, and changes in net assets for the year ended

June 30, 2011, in good form. See Illustration 16–2; however, display expenses using

functional classifications as shown in Illustration 16–6.

2. Prepare a statement of net assets as of June 30, 2011, in good form. For the period, net

assets restricted for capital projects increased by $3,000, and net assets restricted for debt

service increased by $150; all bonded debt relates to capital assets. See Illustration 16–1.

3. Prepare a statement of cash flows for the year ended June 30, 2011. Information on

changes in assets and liabilities is as follows: Accounts Receivable (net) increased by

$2,574; Due from State decreased by $14,842; Accounts Payable and Accrued Liabilities

increased by $1,962; and Deferred Revenue decreased by $1,763. See Illustration 16–3.

Preview: 16-7. a.

SHERLOCK STATE COLLEGE

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS

FOR THE YEAR ENDED JUNE 30, 2011

(DOLLARS IN THOUSANDS)

Revenues:

Operating revenues:

Student tuition and fees (net of discounts & allowances)

$ 22,530

Grants and contracts

18,196

Auxiliary enterprises

14,595

Total operating revenue

55,321

Expenses:

Operating expenses:

…..

Organizational Form - Suffolk County Case 17–2

https://www.hiqualitytutorials.com/product/acct-567-organizational-form/

Responding to a growing need for medical care as its population grew in the early 1900s, Suffolk County founded the Suffolk County Hospital in 1920, financing construction of the original hospital building and equipment with a $500,000 general obligation bond issue. Over the next 75 years, the hospital was able to sustain its own operations from patient service, federal and state grants, and other revenues, but it relied on the Suffolk County government to finance construction of needed expansions. In 1995, Suffolk County issued $10 million of general obligation bonds to finance a new hospital building. A special property tax levy has paid principal and interest on this debt issue and will continue to do so until 2020. In 1998, the hospital board of trustees signed a 10-year lease and management contract under which the hospital became an affiliate of ABC Medical Group, a for-profit organization. Under the contract, ABC agreed to provide capital financing for plant expansion and equipment modernization, in addition to providing the county with 15 percent of net income, as defined in the contract. Over the past 10 years, the county has received an average of about $1.5 million each year, but it has had no involvement with the operations of the hospital, except for continuing oversight by the elected board of trustees. As the lease contract nears its renewal date, two of the five members of the hospital board are openly questioning ABC’s quality of care and pricing structures. In addition, these members argue that the hospital has not been sufficiently responsive to county patients and has not provided adequate charity care. The other three members of the board believe that ABC is performing well under the lease contract and that the contract should be renewed for another 10 years. These three members of the board believe, however, that the contract should not be renewed unless a higher share of net income can be negotiated with ABC. A target share of 20 percent has been mentioned by one of the board members. As might be expected in such circumstances, the local print and broadcast media have devoted extensive coverage to this issue and public feelings are running strong both for and against renewing the lease contract with ABC. For the most recent year, ABC reported $10.9 million of net income on revenues of $17.4 million and expenses of $6.5 million. Required

1. Assume you are the county finance director and have been asked to evaluate the arguments for and against renewing the lease contract with ABC Medical Group. What financial and nonfinancial factors would you consider in conducting your analysis and preparing recommendations to share with the hospital board of trustees?

2. What factors, in your judgment, are most important in deciding whether or not to renew the lease contract? Preview 17-2. a. Although two board members raised concerns about the quality of care and pricing structures, one should not overlook the possibility that political factors may influence all board members’ views. Apparently, the two… Medicare and Medicaid Case 17–3 https://www.hiqualitytutorials.com/product/acct-567-medicare-medicaid/ The federal government through the Medicare and Medicaid programs is one of the largest providers of patient service revenues to health care organizations. Information concerning these programs is available through the Department of Health and Human Services Web site. Required Accessing the Web site at www.cms.hhs.gov, answer the following questions: 1. Who are the recipients of Medicare and Medicaid program benefits? 2. What were the annual outlays (expenditures) for each program for the most recent year?

3. What is CMS? 4. What is the National Program on Integrity and what are the objectives of its program reviews?

5. What factors do you believe contribute to fraud in Medicare and Medicaid programs? Preview 17-3. a. In general, Medicare benefits are provided to individuals aged 65 and over. Medicare benefits may also be provided to individuals younger than 65 if certain health related qualifications are met. Medicaid benefits are provided to individuals and families… Not-for-Profit Financial Statements - Renfrow Rehabilitation Center Problem 17–3 https://www.hiqualitytutorials.com/product/acct-not-for-profit/ Renfrow Rehabilitation Center uses fund accounting for internal purposes. Presented is the December 31, 2011 balance sheet prepared from the funds the center uses. Required The controller asks that you prepare an aggregated balance sheet in accordance with current financial reporting standards for a not-for-profit health care organization using SFAS No. 117 and the AICPA Audit and Accounting Guide, Health Care Organizations. Based on additional information provided, you determine that

1. The cash and investments of the plant are restricted under the terms of several gifts to use for plant expansion, with income from plant fund investments restricted to the same purpose.

2. Income from endowment fund investments may be used at the discretion of the center’s governing board.

RENFROW DRUG REHABILITATION CENTER BALANCE SHEET

AS OF DECEMBER 31, 2011

ASSETS CASH $ 120,000 SHORT-TERM INVESTMENTS 500,000 ACCOUNTS AND NOTES RECEIVABLE $ 137,000 LESS: ALLOWANCE FOR UNCOLLECTIBLES 27,000 110,000 INVENTORY 74,000 TOTAL CURRENT ASSETS

Revenue and Related Transactions - Dearborn General Hospital Problem 17–5 https://www.hiqualitytutorials.com/product/acct-revenue-related-transactions/ During its current fiscal year, Dearborn General Hospital, a not-for-profit health care organization, had the following revenue-related transactions (amounts summarized for the year).

1. Services provided to inpatients and outpatients amounted to $9,600,000, of which $450,000 was for charity care, $928,000 was paid by uninsured patients, and $8,222,000 was billed to Medicare, Medicaid, and insurance companies.

2. Pharmaceutical drugs sold by the hospital pharmacy amounted to $970,000, all of which was paid by customers or insurance.

3. Medicare, Medicaid, and third-party payors (insurance companies) approved and paid $5,365,000 of the $8,222,000 billed by the hospital during the year (see transaction 1).

4. An unconditional contribution of $5,000,000 was received in cash from a donor to construct a new facility for care of Alzheimers patients. The full amount is expendable for that purpose. No activity occurred on this project during the current year.

5. A total of $840,000 was received from the following activities/sources: cafeteria and gift shop sales, $710,000; unrestricted transfers from the Dearborn General Hospital Foundation, $75,000; and fees for medical transcripts, $55,000. 6. The allowance for uncollectible receivables was increased by $1,200.

Required 1. Record the preceding transactions in general journal form. 2. Prepare the unrestricted revenues, gains, and other support section of Dearborn General Hospital’s statement of operations for the current year, following the format in Illustration 17–4.

3. On which statement would restricted contributions be reported? Explain. The citation provided is a guideline. Please check each citation for accuracy before use. Preview Problem 17-5

DEARBORN GENERAL HOSPITAL GENERAL JOURNAL

Debits Credits

1. ACCOUNTS AND NOTES RECEIVABLE 8,222,000 CASH 928,000 PATIENT SERVICE REVENUE 9,150,000

1. CASH 970,000 OTHER REVENUE

….

Restricted Contribution Jackson Hospital Problem 17-4 https://www.hiqualitytutorials.com/product/acct-public-university-transactions/ Under the will of Samuel H. Samuels, a bequest of $100,000 was received for research on gerontology. The principal of the bequest, as well as any earnings on investments, is expendable for the specified research purpose.

1. Pending the need for the money for the designated purpose, part of the bequest was invested in $95,000 of par value City of Jackson 6 percent bonds at 103 plus accrued interest of $823. 2. An interest payment of $2,850 was received on the City of Jackson bonds. 3. The bonds were sold at 104 plus accrued interest of $443. 4. The income from the Samuels gift was used for the stipulated purpose. Required Make journal entries for these transactions assuming that this is a not-for-profit hospital. Governmental Hospital - Nichols County Hospital Problem 17-6 https://www.hiqualitytutorials.com/product/acct-567-governmental-hospital/ During 2011, the following selected events and transactions were recorded by Nichols County Hospital.

1. Gross charges for hospital services, all charged to accounts and notes receivable, were as follows:

2. After recording patient service revenues, it was determined that $52,000 related to charity care. 3. Additional information relating to current-year receivables and revenues is as follows: 4. During the year, the hospital received unrestricted cash contributions of $50,000 and unrestricted cash income from endowment investments of $6,500.

5. A federal cost reimbursement research grant of $350,000 was awarded. As of the end of the year, $200,000 in expenses related to the grant had been made. (Hint: See Chapter 4 for eligibility requirements.)

6. New equipment costing $39,000 was acquired from donor-restricted cash. An X-ray machine that cost $31,000 and had a book value of $2,400 was sold for $500 cash. 7. Vouchers totaling $1,340,200 were issued for the following items: 1. Collections of accounts receivable totaled $1,159,000. Accounts written off as uncollectible amounted to $11,900. 2. Cash payments on vouchers payable (paid to employers and suppliers) during the year were $1,031,200. 3. Supplies of $68,000 were issued to nursing services. 4. On December 31, 2011, accrued interest income on investments was $800. 5. Depreciation of buildings and equipment was as follows: 6. On December 31, 2011, closing entries were made in the general journal.

Required 7. Show in general journal form the entries that should be made for each of the transactions and the closing entries in accordance with the standards for a governmental health care entity that follows proprietary fund accounting, as discussed in this chapter and Chapter 7.

8. Using the available information, calculate the net patient service revenue that would be reported on the statement of revenues, expenses, and changes in net assets. ACCT 567 Accounting for Government and NFP Governmental Hospital - Oak Valley Hospital Problem 17-7 https://www.hiqualitytutorials.com/product/acct-oak-valley-hospital/ During 2011, the following selected events and transactions were recorded by Nichols County Hospital.

1. Gross charges for hospital services, all charged to accounts and notes receivable, were as follows:

2. After recording patient service revenues, it was determined that $52,000 related to charity care. 3. Additional information relating to current-year receivables and revenues is as follows: 4. During the year, the hospital received unrestricted cash contributions of $50,000 and unrestricted cash income from endowment investments of $6,500. 5. A federal cost reimbursement research grant of $350,000 was awarded. As of the end of the year, $200,000 in expenses related to the grant had been made. (Hint: See Chapter 4 for eligibility requirements.)

6. New equipment costing $39,000 was acquired from donor-restricted cash. An X-ray machine that cost $31,000 and had a book value of $2,400 was sold for $500 cash. 7. Vouchers totaling $1,340,200 were issued for the following items: 1. Collections of accounts receivable totaled $1,159,000. Accounts written off as uncollectible amounted to $11,900. 2. Cash payments on vouchers payable (paid to employers and suppliers) during the year were $1,031,200. 3. Supplies of $68,000 were issued to nursing services. 4. On December 31, 2011, accrued interest income on investments was $800. 5. Depreciation of buildings and equipment was as follows:

6. On December 31, 2011, closing entries were made in the general journal. Required

7. Show in general journal form the entries that should be made for each of the transactions and the closing entries in accordance with the standards for a governmental health care entity that follows proprietary fund accounting, as discussed in this chapter and Chapter 7.

8. Using the available information, calculate the net patient service revenue that would be reported on the statement of revenues, expenses, and changes in net assets. Not-for-Profit Hospital - Phelps Community Hospital Problem 17–8 https://www.hiqualitytutorials.com/product/acct-not-profit-hospital/ The Phelps Community Hospital balance sheet as of December 31, 2010, follows. Required

1. Record in general journal form the effect of the following transactions during the fiscal year ended December 31, 2011, assuming that Phelps Community Hospital is a not-forprofit hospital. (1) Summary of revenue journal: (2) Summary of cash receipts journal: (3) Purchases journal: (4) Payroll journal: (5) Summary of cash payments journal: (6) The following additional information relates to assets limited as to use: (a) $10,000 in CDs matured on which $590 in interest was earned. (b) $30,000 was reinvested in CDs. (c) $12,300 in equipment was purchased. (7) Depreciation charges for the year amounted to $117,000 for the buildings and $128,500 for equipment. (8) Other information: (a) Provision for uncollectible receivables was increased by $3,800. (b) Supplies inventory: (c) Portion of mortgage payable due within one year, $500,000. (9) Assume that there was no change in fair value of investments at year-end. (10) Provisions for bad debts, interest expense, and depreciation expense were allocated to functional expense accounts in proportion to their preallocation balances. Nominal accounts were closed. (11) Reflecting the net increase in Assets Limited as to Use of $25,640 (see transactions 2, 5, and 6), record the increase in Net Assets—Unrestricted, Designated for Plant Replacement. 1. Prepare a balance sheet as of December 31, 2011. 2. Prepare a statement of operations for the year ended December 31, 2011. Preview

PHELPS COMMUNITY HOSPITAL GENERAL JOURNAL ENTRIES FISCAL YEAR 2011

Debits Credits

1. ACCOUNTS AND NOTES RECEIVABLE 3,422,900 CONTRACTUAL ADJUSTMENTS 162,000 PATIENT SERVICES REVENUE 3,584,900

1. CASH 3,820,600 ASSETS LIMITED AS TO USE¾CASH 7,350 ACCOUNTS AND NOTES RECEIVABLE

…..

Quiz Week 3 https://www.hiqualitytutorials.com/product/acct-567-quiz-week-3/ (TCO A) Which of the following items are considered Required Supplementary Information (RSI)? (TCO B) In addition to the government-wide statements, governmental entities are required to prepare fund financial statements for which of the following category of funds? (TCO C) The County Commission of Hunter County adopted its General Fund budget for the year ending June 30, comprising of estimated revenues of $3,750,000 and appropriations of $3,150,000. Hunter County utilizes the budgetary accounts required by GASB standards. The budgeted excess of estimated revenues over appropriations will be recorded as (TCO D) Which of the following is a true statement regarding the use of a Special Revenue Fund? (TCO B) Which of the following is true regarding the government-wide Statement of Net Assets? (TCO D) GASB standards _____ that each governmental reporting entity display _____ General Fund in its general-purpose financial statements. (TCOs A and B) Please list and describe the three major sections of the Comprehensive Annual Financial Report and provide a brief description hatof w is included in each of the section. (TCO D) The City of Minyard adopted the following budget for fiscal year 2012: Anticipated Revenues: Property Taxes $4,480,000 …. (TCO D) The City of Martinville had the following pre-closing account balances in its General Fund as of June 30, 2012. Debits and credits are not separated; each account had its “normal” balance. Among the expenditures that are recorded this year is an amount that has been expended on supplies ordered at the end of the previous year. Assume that the encumbrances do not lapse and that the city failed to make the proper journal entry or entries necessary to re-establish the encumbrance in the current year. Pre-closing Trial Balance of the City of Martinville as of June 30, 2012: Cash $80,000 Estimated Revenues 6,300,000 Revenues 6,380,000 Appropriations 5,890,000 …. The following information was available for the General Fund for the City of Newman for the Year Ended June 30, 2012. a. Revenues for the year: Property Taxes of $6,240,000, fines and penalties of $484,000, sales taxes of $453,000, intergovernmental revenue of $272,000, and charges for services of $64,000. b. Expenditures from current appropriations included: General Government of $3,320,000, Public Safety of $1,923,000, Public Works of $821,000, Health and Welfare of $294,000, and Miscellaneous Appropriations of $42,000. c. A transfer was made from the General Fund to the Debt Service Fund of $700,000. A transfer of $510,000 was made to the General Fund from the Enterprise Fund.

d. A sale of city-owned land was made to a private enterprise which is considered infrequent but not unusual was under city management control. The proceeds amounted to $330,000 and the land had a basis of $200,000 which was reported in the government-wide Statement of Net Assets the year before. e. Beginning balances included Fund Balance in the amount of $290,000 and Reserve for Encumbrances in the amount of $20,000. Required: Prepare a statement of Revenues, Expenditures, and Changes in Fund Balance for the General Fund for the City of Newman for the Year Ended June 30, 2012. The following information was available for the General Fund for the City of Axton for the year ended June 30, 2012.

1. Revenues for the year: Property Taxes of $7,500,000, fines and penalties of $543,000, intergovernmental revenue of $382,000, and miscellaneous revenues of $118,000. 2. Expenditures from current appropriations included: General Government of $4,975,000, Public Safety of $1,849,000, Public Works of $754,000, Parks and Recreation of $234,000, and Miscellaneous Appropriations of $22,000.

3. A transfer was made from the General Fund to the Debt Service Fund of $600,000. A transfer of $430,000 was made to the General Fund from the Enterprise Fund.

4. A sale of a city-owned building was made to a private enterprise which is considered infrequent but not unusual was under city management control. The proceeds amounted to $520,000 and the land had a basis of $300,000 which was reported in the governmentwide Statement of Net Assets the year before.

5. Beginning balances included Fund Balance in the amount of $320,000 and Reserve for Encumbrances in the amount of $35,000. Required: Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the General Fund for the City of Axton for the Year Ended December 31, 2012. (Points : 10) City of Shipley Case Study Week 5 https://www.hiqualitytutorials.com/product/acct-567-city-shipley/ The City of Shipley maintains an Employee Retirement Fund; a single-employer, defined benefit plan that provides annuity and disability benefits. The fund is financed by a process that makes actuarially determined contributions from the city’s General Fund and by contributions that are made by the employees. The General Fund is handling the administration of the retirement fund and it does not have any administrative expenses. The Statement of Net Assets for the Employees’ Retirement Fund as of July 1, 2011 is shown below: City of Shipley Employees Retirement Fund Statement of Net Assets As of July 1, 2011 Assets Cash $ 60,000 Accrued Interest Receivable 160,000 Investments, at fair value Bonds 5,500,000 Common Stock 1,600,000 Total Assets $ 7,320,000 Liabilities Accounts Payable and Accrued Expenses 430, 000

Net Assets Held in Trust for Pension Benefits $6,890,000 The following transaction took place during the fiscal year 2012: The interest receivable on investment was collected in cash. Member contributions in the amount of $460,000 were received in cash, the city's General Fund also contributed $700,000 in cash. Annuity benefits of $780,000 and disability benefits of $200,000 were recorded as liabilities. Accounts payable and accrued expenses in the amount of $820,000 were paid in cash. Interest income of $320,000 and dividends in the amount of $60,000 were received in cash. Bond interest income of $160,000 was accrued at the end of year. Refund of $150,000 were made in cash to terminated, non vested participating employees. Common stocks, which are carried at a fair value of $500,000, were sold for $472,000. The amount of the sales price of the stock plus an additional $360,000 was invested in stock. As of the end of the fiscal year, June 30, 2012, a determination has been made that the fair value of the stocks held by the pension plan had decreased by $60,000; the fair value of bond had increased by $35,000. Temporary accounts for the year were closed. Preview:

Debit Credit

1 Cash 160,000 Accrued Interest Receivable 160,000

2 Cash 1,160,000

Quiz Week 6 https://www.hiqualitytutorials.com/product/acct-567-quiz-week-6/ (TCO F) Any activities that produce goods or services to be provided to other departments or other governmental units would be reported in which fund? (Points : 5) (TCO F) Proprietary funds (Points : 5) (TCO F) Which of the following is false regarding proprietary fund accounting? (Points : 5) (TCO F) Government units use which fund type to account for services provided to the general public on a user-fee basis? (Points : 5) (TCO G) A fund that is the result of an agreement between a contributor and a government that the principal and/or income of trust assets that is for the benefit of individuals, organizations, or other governments is a(n) (Points : 5) (TCO H) Which of the following would be considered a performance audit under the Governmental Auditing Standards? (Points : 5) (TCO J) Government-wide financial statements present the government’s financial position using which of the following? (Points : 5) (TCO J) Which of the following kinds of information would not be provided by management’s discussion and analysis (MD&A)?(Points : 5) (TCO H) Which of the following would be considered “contribution revenue or support” of a not-for-profit organization? (Points : 5) (TCO H) Describe the different types of governmental audits and attestation engagements. (Points : 20) (TCO F) Internal Service Fund, Statement of Cash Flows. Prepare a statement of cash flows for the internal service fund for the city of Pearman from the following information:

(TCO F) Which of the following is a true statement regarding the cash flow statements of a proprietary fund? (TCO H) Public sector audits differ from those of commercial businesses in which of the following instances? (TCO J) Under GASB Standards, if a government only has six government funds and two enterprise funds, what is the required number of basic financial statements that it would need to prepare? Midterm Exam https://www.hiqualitytutorials.com/product/acct-567-midterm-exam/ (TCO A and B) Fiduciary funds are to use which of the following measurement and basis of accounting? (Points : 5) (TCO A and B) Funds other than the General Fund are required to be considered to be a major fund when (Points : 5) (TCO A and B) Which of the following is most correct with regard to Management’s Discussion and Analysis? (Points : 5) (TCO B and C) With regards to budgetary reporting by governmental entities, which of the following is not a true statement? (Points : 5) (TCO B and C) The proper journal entry to record an encumbrance would include which of the following? (Points : 5) (TCO B and C) Capital assets that are used by an enterprise fund should be accounted for in the following fund? (Points : 5) (TCO E) When a government acquires general fixed assets under a capital lease agreement, how should the asset be recorded in the government-wide financial statements? (Points : 5) (TCO E) Which of the following projects would usually be accounted for in a capital projects fund? (Points : 5) (TCO E) Which of the following statements is a true statement regarding the reporting of debt service funds? (Points : 5) (TCO D) Under GASB Statement No. 33, when would a special revenue fund be considered to have satisfied the eligibility requirement of a reimbursement type federal grant? (Points : 5) (TCO E) You are in a staff meeting with the city controller and one of your colleagues was quoted as follows: “Capital projects funds are established by a government to account for all plant or equipment acquired by construction.” Do you agree with this statement? Why or why not? (Points : 30) (TCO A and B) How are the major funds of a state or local government determined by a governmental entity? (Points : 30) (TCO E) You are in a staff meeting with the city controller and one of your colleagues was quoted as follows: “Capital projects funds are established by a government to account for all plant or equipment acquired by construction.” Do you agree with this statement? Why or why not? (Points : 30) (TCO A and B) How are the major funds of a state or local government determined by a governmental entity? (Points : 30) (TCO D) The City of Norton received a gift of $3,500,000 from a group of local residents on April 1, 2012 and signed an agreement that the funds would be invested on a permanent basis and the income would be used to purchase artifacts for the city museum. The following transactions took place during the fiscal year ended Dec 31, 2012.

1. The gift was recorded on the books on April 1. b. On April 1, 2012, the Calvin Co. bonds were purchased in the amount of $3,000,000, at par. The bonds carry an annual interest rate of 5 percent, payable semiannually on October 1 and April 1. The city also purchased a certificate with a face value of $250,000 pays interest of 4 percent on semiannually on October 1 and April 1. c. On October 1, the semiannual interest was received on the bonds and certificate of deposit. d. From October 1 through December 1, payments were made totaling $85,000 to purchase artifacts for the city museum. e. On December 31, an accrual … (TCO B and C)Governmental Fund Balance is required to be displayed in which of the categories? (TCO E)King City receives a trust donation for the purpose of maintaining flower in city parks, but the donor does not make a specification as to how the principal must be maintained. This type of trust should be appropriately accounted for which of the following fund? (TCO E) Which fund type is the interest on Long Term Debt typically not accrued; however, it is recognized as an expenditure in the year in which interest is legally due? (TCO E) Which of the following funds or activities general journals would it be inappropriate to record depreciation of capital assets? (TCO A and B) What are fiduciary funds? Please identify and explain the two main types and what is the main difference between the funds? Discussions Weeks 1-7 All Students Posts 553 Pages https://www.hiqualitytutorials.com/product/acct-567-all-discussions/ Standard Setting Bodies and Accounting Governmental System Discussions Week 1 All Posts 90 Pages https://www.hiqualitytutorials.com/product/acct-setting-bodies-accounting/ Standard Setting Bodies - 55 Pages https://www.hiqualitytutorials.com/product/acct-standard-setting-bodies/ Discuss some of the major differences between GASB and FASB when it comes to setting accounting standards. Can you identify these accounting standards setting bodies and the organizations for which they set accounting standards? Do a little research on the internet to find out where the organizations are located, how many members are on the board and whether they are elected or who appoints them. How long have they been in existence and what is their history? How were standards set before the boards were established? What process is involved in setting a new standard and what are some current areas of research for the boards?... Accounting Governmental System - 35 Pages https://www.hiqualitytutorials.com/product/acct-accounting-governmental-system/ Why are there major differences between governmental accounting systems vs. business accounting systems? If generally accepted accounting principles are good enough for business organizations then why can't we just apply them to non-profit entities such as governmental and not-for-profit organizations? What are some characteristics that distinguish non-profit entities from business organizations? How do the objectives of financial reporting for non-profit entities differ from financial reporting for business entities?...

Adoption of a Budget and Governmental Accounting Transactions Discussions Week 2 All Students Posts 77 Pages https://www.hiqualitytutorials.com/product/adoption-budget-governmental-accounting/ Adoption of a Budget - 41 Pages https://www.hiqualitytutorials.com/product/acct-567-adoption-budget/ How does the adoption of a budget in a governmental entity differ from the adoption of a budget by a commercial enterprise? Both businesses and governments develop budgets, however there are some unique legal aspects related to a government budget. How do government budgets relate to the law and to authorization to spend public funds? Encumbrances are also related to governmental budgeting. What is an encumbrance and what purpose do encumbrances serve?... Governmental Accounting Transactions - 36 Pages https://www.hiqualitytutorials.com/product/acct-governmental-accounting-transactions/ Please provide an explanation as to why accounting transactions for governmental activities as the governmental-wide level tend to be reported differently than transactions for the General Fund? Could you cite some examples? What is the difference between an expenditure and an expense and why do governmental funds records expenditures rather than expenses? When is an expenditure recognized in the accounting records versus when an expense is recognized?... Capital Funds Purposes and Purpose of a Debt Service Fund Discussions Week 3 All Students Posts 82 Pages https://www.hiqualitytutorials.com/product/acct-discussions-week-3/ Capital Funds Purposes - 40 Pages https://www.hiqualitytutorials.com/product/acct-capital-funds-purposes/ When should a capital projects fund be used by a governmental entity? Is it mandatory that a governmental entity use a capital project fund for GAAP purposes? When should a capital projects fund be used by a governmental entity? Is it mandatory that a governmental entity use a capital project fund for GAAP purposes? Let's also list some advantages of using a capital projects fund. What benefits does the use of a capital projects fund provide?... Purpose of a Debt Service Fund - 42 Pages https://www.hiqualitytutorials.com/product/acct-purpose-debt-service/ When does GAAP require the use of a debt service fund? Are there instances when a governmental entity is not required to use a debt service fund? Let’s address the introductory questions in this discussion also: When does GAAP require the use of a debt service fund? Are there instances when a governmental entity is not required to use a debt service fund? Why don't business type organizations use a debt service fund?... Accounting Similarities and Internal Service Funds Discussions Week 4 All Students Posts 100 Pages https://www.hiqualitytutorials.com/product/acct-accounting-similarities-internal/ Accounting Similarities - 52 Pages https://www.hiqualitytutorials.com/product/acct-567-accounting-similarities/ How would you compare the accounting for enterprise funds with that of (a) businesses and (b) governmental funds? The opening question asks us to compare the accounting for enterprise funds with the accounting for business organizations. One of the differences relates to the fact that a business has owner's equity and a government entity does not. Let's begin by identifying the accounts in a proprietary fund that would relate to the equity in a business. How does this section of the statement of net assets differ from the equity section of a business balance sheet?... Internal Service Funds - 48 Pages

https://www.hiqualitytutorials.com/product/acct-internal-service-funds/ What types of activities are recorded under the internal services account? Please provide examples. Is the government required to account for activities in the internal service fund or in another fund? What types of activities are recorded under the internal services account? Can you provide some examples of internal service funds and the types of goods or services that they would provide. Is the government required to account for activities in the internal service fund or in another fund?... Fiduciary Funds and Financial Reporting Discussions Week 5 All Students Posts 71 Pages https://www.hiqualitytutorials.com/product/fiduciary-funds-financial-reporting/ Fiduciary Funds - 35 Pages https://www.hiqualitytutorials.com/product/acct-567-fiduciary-funds/ Discuss various situations in which a government has fiduciary responsibility but does not report them in fiduciary funds. Fiduciary relationships are very common in business and law. Let's begin by defining a fiduciary and a fiduciary relationship. Can you give some examples of each? How does a trust fund differ from an agency fund? Why does an agency fund not recognize revenues, expenses and equity? What is a tax agency fund and what are some issues that complicate accounting for tax agency funds?... Financial Reporting - 36 Pages https://www.hiqualitytutorials.com/product/acct-567-financial-reporting/ What basis of accounting is used to report governmental activities in government-wide financial statements? Can another basis be used? Let's also look at current events related to pensions. Can you identify some states around the country and some cities in California that are having problems related to public employee pensions? What types of problems are they having and why? What do you think has caused these problems? Class, what are interim reports and why are they important? Can you give some examples of interim reports? What are some considerations when determining whether a component unit should be presented discretely or blended in the financial statements? What are some reasons that the figures in the governmental activities section of the government-wide financial statements would differ from the governmental funds in the fund financial statements? What is OCBOA and why might a government use OCBOA rather than GAAP?... Auditing Differences and Not-For-Profit Organizations Discussions Week 6 All Students Posts 59 Pages https://www.hiqualitytutorials.com/product/acct-discussions-week-6/ Auditing Differences - 28 Pages https://www.hiqualitytutorials.com/product/acct-567-auditing-differences/ In what significant way do financial audits in government and not-for-profit organizations differ from those carried on in businesses? Which organization establishes GAGAS and what can you tell us about this organization?... Not-For-Profit Organizations - 31 Pages https://www.hiqualitytutorials.com/product/not-for-profit-organizations/ How do not-for-profit organizations differ from government activities in the way the account for business-type activities, such as dining halls, gift shops, and admission fees? What are the three levels of audit to which governments and not-for-profit organizations may be subjected and what are some differences between them?... Colleges and Universities and Differences in Government and Commercial Acct Discussions Week 7 All Students Posts 74 Pages

https://www.hiqualitytutorials.com/product/acct-discussions-week-7/ Colleges and Universities - 38 Pages https://www.hiqualitytutorials.com/product/acct-567-colleges-universities/ What financial statements must be presented by a government university that engages in only business-type activities? Is there a GASB or FASB requirement that mandates this type of implementation? Which organization(s) develop accounting principles for public and private colleges and universities? What are some of the differences between these two sets of accounting principles?... Differences in Government and Commercial Acct - 36 Pages https://www.hiqualitytutorials.com/product/acct-differences-government-commercial/ What are some of the key differences between government healthcare accounting and commercial accounting? How do public and private colleges and universities raise most of their revenue? What are endowments, split-interest agreements and annuity agreements?... Final Exam https://www.hiqualitytutorials.com/product/acct-567-final-exam/ (TCO A) On what should the government-wide financial statements report? (Points : 5) Net position and results of the financial operations of the government as a whole. Budgetary Compliance The cost of government services Fiscal accountability (TCO A) Which of the following groups is considered a primary user of a state or local government’s general-purpose external financial statements? (Points : 5) Managers and administrators Employees Special Interest Groups Citizens (TCO A) Which of the following statements should be prepared by all not-for-profit organizations? (Points : 5)

� Statement of functional expenses

� (B) Statement of revenues, expenses, and changes in net position

� (C) Statement of financial position

� Both A and B (TCO B) According to GASB standards, when should transfers be recognized? (Points : 5) When earned. When collected in cash. When authorized by the budget ordinance. In the period the interfund receivable and payable arise. (TCO C) Comparisons of budgeted versus actual revenues and expenditures are a requirement of which of the following situations? (Points : 5) Required by GAAP for the general fund and major special revenue funds for which an annual budget has been legally adopted. Required by GAAP for all government fund types. Required by GAAP for internal management reports only, they are not permitted for external financial reporting.

It is optional under GASB standards for all funds. (TCO C) Which of the following will increase the fund balance of a government at the end of the fiscal year?(Points : 5) The sum of revenues and other financing sources is more than the sum of expenditures and other financing uses. Expenditures are more than the difference between revenues and the excess of other financing sources over other financing uses. Revenues are more than the sum of expenditures, other financing sources, and other financing uses. The sum of fund balance, revenues, and other financing sources is more than the sum of expenditures and other financing uses. (TCO C) When the budget of a government is recorded and when appropriations exceeds estimated revenues, the budgetary fund balance account is (Points : 5) credited at the beginning of the year and debited at the end of the year. credited at the beginning of the year and no entry is made at the end of the year. debited at the beginning of the year and no entry is made at the end of the year. debited at the beginning of the year and credited at the end of the year. (TCO D) The revenues account of a government entity is debited when (Points : 5) The budget is recorded at the beginning of the year. Property taxes are recorded. The account is closed to fund balance-unassigned at the end of the year. Property taxes are collected. (TCO D) The General Fund used electricity provided by the city-owned electric utility (an enterprise fund of the city). The General Fund general journal entry to record the transaction will include (Points: 5) A debit to Due to Other Funds. A debit to Interfund Transfers Out. A debit to Expenses. A debit to Expenditures. (TCO E) During the year, a wealthy local businessman donated a building to city of Perris. The original cost of the building was $340,000. Accumulated depreciation at the date of the gift amounted to $220,000. The appraised fair market value of the donation at the date of the gift was $525,000 of which $35,000 was the value of the land on which the building was situated. At what amount should the city record this donated property in the governmental activities accounts at the government-wide level? (Points : 5) $220,000. $120,000. $340,000. $525,000. (TCO E) Which of the following resource inflows would be recorded as a revenue of a debt service fund? (Points : 5) Receipt of the premium on a new bond issue. Property taxes levied by the debt service fund for debt service purposes. Taxes collected by the General Fund and transferred to the debt service fund. Transfer of the residual equity of a capital projects fund to the debt service fund.

(TCO E) A government enters into a capital lease for the purchase of a new fire truck. The present value of the future lease payments is $830,500 and there is a down payment at the beginning of the lease of $32,000. What amount should be recorded in the governmental activities account for the fire truck? (Points : 5) $32,000 $830,500 $798,500 $862,500 (TCO E) Which of the following budgetary accounts is typically used by a debt service fund? (Points : 5) Encumbrances Encumbrances Outstanding Estimated Uncollectible Accounts Appropriations (TCO G) Which of the statements concerning agency funds is a true statement? (Points : 5) Agency funds use the same basis of accounting as permanent funds. Agency funds are reported only on the statement of fiduciary net position. Agency funds use the temporary accounts—Additions and Deductions. Agency funds never receive cash. (TCO G) What basis of accounting helps maintain the original principal of a trust? (Points : 5) Cash basis Accrual basis Modified accrual basis Legal basis (TCO J) Which of the following items are typically reported differently between the governmental fund statements and the governmental activities column of the governmentwide statements? (Points : 5) Inventories Cash collected on property taxes receivable Capital outlays Accounts Payable and other accrued expenses (TCO J) GASB standards require that governmental fund financial statements include which of the following?(Points : 5)

� Balance Sheet

� Statement of activities

� Statement of cash flows Both A and B (TCO J) The government-wide financial statements required by GASB standards are a (Points : 5) statement of net position and statement of cash flows statement of net position, statement of activities, and statement of cash flows statement of activities and statement of cash flows statement of net position and statement of activities

(TCO H) A condition whereby the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis is called a(an) (Points : 5) system design weakness. deficiency. unacceptable reportable condition. audit alert item. (TCO H) Under FASB Standards, how would a not-for-profit organization recognize a conditional pledge? (Points : 5) It would disclose the amount of the conditional pledge in the notes to the financial statements. It would debit Pledges Receivable and credit Deferred Contributions. It would debit Pledges Receivable and credit Contributions—Temporarily Restricted. It would not recognize the conditional pledge until pledge conditions are substantially met. (TCO I) Which of the following items would not affect the amounts reported in the Revenues and Gains section of the statement of activities for a private college or university? (Points : 5) Student tuition and fees Net assets released from restriction Tuition and fees discounts and allowances Deferred revenues (TCO I) How would the estimated uncollectible tuition and fees be reported on the financial statements of a university? (Points : 5)

� It would be reported as part of net revenue by a public university.

� It would be reported as an operating expense by a public university.

� It would be reported as an operating expense by a private university. Both A and C are the proper recording methods of reporting estimated uncollectible tuition and fees. (TCO I) The primary source of revenues for most hospitals are (Points : 5) Investment income. Capitation fees from health maintenance organizations. Exchange transactions, such as fees for services. Nonexchange transactions, such as contributions. (TCO I) Colleges and universities often make loans to students. How would these loans be reported on the financial statements? (Points : 5) An expense A liability A receivable An investment (TCO I) Charity service and bad debts in a public hospital that follows business-type accounting are (Points : 5) both reported as deductions from gross patient revenue in arriving at net patient revenue. both reported as expenses reported differently, with charity service reported as a deduction from gross patient revenue and bad debts reported as an expense. reported differently, with charity service disclosed in the notes to the financial statements and bad debts reported as a deduction from revenue.

(TCOs D, E, F, and G) Please list the name of the fund(s) in which each of the following transactions or events would be recorded. (1) Proceeds of $500,000 were received from a bond issue were used for the purchase of the privately owned water utility in the city. (2) Property taxes of $300,000 were designated to be set aside for the eventual retirement of the City Hall building bonds that were collected. (3) Payment of $800,000 was made to a contractor for progress made in the construction of the new City Hall building. (4) Interest of $50,000 was paid on the bonds issued for the purchase of the water utility. (5) Interest of $100,000 was paid on the bonds issued for the payment of the improvement of streets in the residential district. (6) City motor vehicle license fees of $40,000 were to be used for general street expenditures were collected. (Points : 30)

(TCOs D, E, F, and G) Please list the name of the fund(s) in which each of the following transactions or events would be recorded.(1) Bonds of $1,000,000 from which the proceeds are to be used for the construction of a new City Hall building. (2) Salaries of $170,000 were paid to personnel in the office of the mayor. (3) Installment payments of $75,000 were received from the property owners that were assessed for the street improvement project. (4) Over $65,000 of funds were received by employees by payroll deductions that are to be used for the purchase of United States Government Bonds for those employees on an individual basis. (5) Materials of $140,000 were to be used for the general repair of the streets that were purchased by the city. (6) Excess funds of $60,000 were transferred from the water utility to the General Fund. (Points : 30)

(TCO F) The garbage collection of the city of Rockwell could be accounted for through

the General Fund, a Special Revenue Fund, or an Enterprise Fund. Please identify the

circumstances in which each of these fund types might be appropriate. (Points : 40)

(TCO F) (1) What are the key differences between the cash flow

statement

requirements for Enterprise Funds and those for business enterprises?

(2)

Please identify the proper classification on the statement of cash flow of

the

Enterprise Fund versus the Private Business Enterprise.

Transaction Type

Government

Classification

Business Classification

Capital asset acquisition/sale

Capital debt issue/retirement

Noncapital

debt

issue/retirement

Interest paid on capital

debt

Interest paid on noncapital debt

Receipt of investment earnings

(Points : 40)

3. (TCO I) During the fiscal year of June 2012, Jefferson General Hospital, a not-forprofit healthcare organization, had the following revenue-related transactions. (The amounts are summarized for the entire year.)

(1) Healthcare services that are provided to inpatients and outpatients amounted to $9,640,000, of which $420,000 were for charity cases, $865,000 was paid by uninsured patients, and $8,355,000 was billed to Medicare, Medicaid, and other insurance companies. (2) Pharmaceutical drugs and medicines sold by the hospital pharmacy amounted to $830,000, all of which was paid by the customer or the insurance companies. (3) Medicare, Medicaid, and third-party payors (insurance companies) approved and paid $5,640,000 of the $8,355,000 billed by the hospital during the year (please review transaction #1). (4) A contribution of $4,000,000 (of which is unconditional) was received in cash from a donor to construct a new facility for cancer patients. The full amount is expendable for that purpose. No activity has taken place during the current year. (5) A total of $810,000 was received from the following activities/sources: cafeteria and gift shop sales, $630,000, unrestricted transfers from the Claremont Hospital Foundation, $110,000, and fees for medical transcripts, $70,000. (6) The allowance for uncollectible receivables was increased by $1,350.Enter the templates provided in the answer space and complete the following requirements: Requirements: a. Record the preceding transactions in general journal form. b. Prepare the unrestricted revenues, gains, and other support section of Jefferson General Hospital’s statement of operations for the current year.(Points : 40)

4. (TCO E) Enter the template provided in the answer space and record the following transactions in the Capital Projects Fund in the general journal for the following transactions.a. McDowell County issued $4,000,000, 5% bonds with interest payable on a semiannual basis on July 1 and January 1. The bonds sold for 102 on July 30, 2012. Proceeds from the bond issue were to be used for construction of the new sheriff station with all interest and premiums received to be used to service the debt issue. b. A state grant of $250,000 was received to help finance the construction of the sheriff station. c. The General Fund transferred $300,000 for use in the construction of the new sheriff station. d. A federal grant of $500,000 was received to help finance the construction of the new sheriff station. e. A construction contract was awarded to the Young Construction Company in the amount of $4,750,000.

f. The new sheriff station was completed on May 1, 2013, three months ahead of schedule. The construction expenditures amounted to $4,870,000. When the project was completed, the cost of the sheriff station was allocated to the following, $310,000 for land, $4,180,000 for the building, and the remainder to equipment. g. The temporary accounts of the capital projects were closed to Fund Balance-Restricted. The amounts are restricted due to the bond issue that is related to the construction of the sheriff station. The capital projects fund will be closed by transferring remaining funds to the debt service fund for repayment.(Points : 40)

(TCO E) Please record the following transactions in the Capital Projects Fund in the general journal for the following transactions. a. McDowell County issued $4,000,000, 5% bonds with interest payable on a semiannual basis on July 1 and January 1. The bonds sold for 102 on July 30, 2012. Proceeds from the bond issue were to be used for construction of the new sheriff station with all interest and premiums received to be used to service the debt issue. b. A state grant of $250,000 was received to help finance the construction of the sheriff station. c. The General Fund transferred $300,000 for use in the construction of the new sheriff station. d. A federal grant of $500,000 was received to help finance the construction of the new sheriff station. e. A construction contract was awarded to the Young Construction Company in the amount of $4,750,000. f. The new sheriff station was completed on May 1, 2013, three months ahead of schedule. The construction expenditures amounted to $4,870,000. When the project was completed, the cost of the sheriff station was allocated to the following, $310,000 for land, $4,180,000 for the building, and the remainder to equipment. g. The temporary accounts of the capital projects were closed to Fund Balance-Restricted. The amounts are restricted due to the bond issue that is related to the construction of the sheriff station. The capital projects fund will be closed by transferring remaining funds to the debt service fund for repayment. (Points : 40)

5. (TCO F) The following Statement of Cash Receipts and Disbursements was prepared by the bookkeeper of the City of Glass City Museum of Science. The museum is a component unit of the City of Glass City and must be included in the city’s financial statements. It began operations on January 1, 2012 with no liabilities or commitments and only two assets.

(1) $6,000 in cash and (2) Land that was acquired for $11,000.Cash Basis

12 months

Cash Receipts:

Admission Fees

$295,000

Loan from the Bank

$50,000

Total deposits

$345,000Cash Disbursements:

Supplies

$62,000

Wages

104,000

Utilities

48,000

Purchase of Equipment

70,000

Purchase of Fixtures

45,000

Interest on the Bank Loan 1,250 Total checks

$330,250Excess of Receipts Over Disbursements $14,750Additional Information:• The loan from the bank is dated April 1 and is for a five-year period. Interest (5% annual rate) is paid on Oct. 1 and April 1 of each year, beginning Oct. 1, 2012.

• The equipment was purchased on April 1, 2012 with the proceeds provided by the bank loan and has an estimated useful life of 10 years (please use the straight-line method of depreciation) for computing depreciation on the equipment. The fixtures were purchased on July 1, 2012 and has an estimated useful life of five years (please use the straight-line method of depreciation) for computing depreciation on the fixtures.

• Supplies on-hand amounted to $5,900 at December 31, 2012.

• All other bills and salaries related to 2012 had been paid by the close of business on December 31.Required: Enter the template provided in the answer space and complete the following requirements: Please prepare a Statement of Revenues, Expenses, and Changes in Net Assets for the year ended December 31, 2012 assuming the city plans to account for its activities on the accrual basis.

(Points : 40)

(TCO F) The following Statement of Cash Receipts and Disbursements was prepared by the bookkeeper of the City of McMurray Museum of Science. The museum is a component unit of the City of McMurray and must be included in the city’s financial statements. It began operations on January 1, 2012 with no liabilities or commitments and only two assets. (1) $12,000 in cash and (2) Land that was acquired for $25,000. Cash Basis 12 months Cash Receipts: Admission Fees $320,600 Loan from the Bank $60,000 Total deposits $380,600 Cash Disbursements: Supplies $71,000 Wages 124,000 Utilities 52,000 Purchase of Equipment 90,000 Interest on the Bank Loan 1,500 Total checks $338,500 Excess of Receipts Over Disbursements $ 42,100 Additional Information:

� The loan from the bank is dated April 1 and is for a five-year period. Interest (5% annual rate) is paid on Oct. 1 and April 1 of each year, beginning Oct. 1, 2012.

• The equipment was purchased on April 1, 2012 with the proceeds provided by the bank loan and has an estimated useful life of 12 years (please use the straight-line method of depreciation) for computing depreciation on the equipment.

• Supplies on-hand amounted to $5,400 at December 31, 2012.

• All other bills and salaries related to 2012 had been paid by the close of business on December 31. Required: Please prepare a Statement of Revenues, Expenses, and Changes in Net Assets for the year ended December 31, 2012 assuming the city plans to account for its activities on the accrual basis. (Points : 40)

Final Exam Multiple Choice Questions and Answers https://www.hiqualitytutorials.com/product/final-exam-multiple-choice/ (TCO A) On what should the government-wide financial statements report? (Points : 5) Net position and results of the financial operations of the government as a whole. Budgetary Compliance The cost of government services Fiscal accountability (TCO A) Which of the following groups is considered a primary user of a state or local government’s general-purpose external financial statements? (Points : 5) Managers and administrators Employees Special Interest Groups Citizens (TCO A) Which of the following statements should be prepared by all not-for-profit organizations? (Points : 5)

� Statement of functional expenses

� (B) Statement of revenues, expenses, and changes in net position

� (C) Statement of financial position

� Both A and B (TCO B) According to GASB standards, when should transfers be recognized? (Points : 5) When earned. When collected in cash. When authorized by the budget ordinance. In the period the interfund receivable and payable arise. (TCO C) Comparisons of budgeted versus actual revenues and expenditures are a requirement of which of the following situations? (Points : 5) Required by GAAP for the general fund and major special revenue funds for which an annual budget has been legally adopted. Required by GAAP for all government fund types. Required by GAAP for internal management reports only, they are not permitted for external financial reporting. It is optional under GASB standards for all funds. (TCO C) Which of the following will increase the fund balance of a government at the end of the fiscal year?(Points : 5) The sum of revenues and other financing sources is more than the sum of expenditures and other financing uses.

Expenditures are more than the difference between revenues and the excess of other financing sources over other financing uses. Revenues are more than the sum of expenditures, other financing sources, and other financing uses. The sum of fund balance, revenues, and other financing sources is more than the sum of expenditures and other financing uses. (TCO C) When the budget of a government is recorded and when appropriations exceeds estimated revenues, the budgetary fund balance account is (Points : 5) credited at the beginning of the year and debited at the end of the year. credited at the beginning of the year and no entry is made at the end of the year. debited at the beginning of the year and no entry is made at the end of the year. debited at the beginning of the year and credited at the end of the year. (TCO D) The revenues account of a government entity is debited when (Points : 5) The budget is recorded at the beginning of the year. Property taxes are recorded. The account is closed to fund balance-unassigned at the end of the year. Property taxes are collected. (TCO D) The General Fund used electricity provided by the city-owned electric utility (an enterprise fund of the city). The General Fund general journal entry to record the transaction will include (Points: 5) A debit to Due to Other Funds. A debit to Interfund Transfers Out. A debit to Expenses. A debit to Expenditures. (TCO E) During the year, a wealthy local businessman donated a building to city of Perris. The original cost of the building was $340,000. Accumulated depreciation at the date of the gift amounted to $220,000. The appraised fair market value of the donation at the date of the gift was $525,000 of which $35,000 was the value of the land on which the building was situated. At what amount should the city record this donated property in the governmental activities accounts at the government-wide level? (Points : 5) $220,000. $120,000. $340,000. $525,000. (TCO E) Which of the following resource inflows would be recorded as a revenue of a debt service fund? (Points : 5) Receipt of the premium on a new bond issue. Property taxes levied by the debt service fund for debt service purposes. Taxes collected by the General Fund and transferred to the debt service fund. Transfer of the residual equity of a capital projects fund to the debt service fund. (TCO E) A government enters into a capital lease for the purchase of a new fire truck. The present value of the future lease payments is $830,500 and there is a down payment at the beginning of the lease of $32,000. What amount should be recorded in the governmental activities account for the fire truck? (Points : 5)

$32,000 $830,500 $798,500 $862,500 (TCO E) Which of the following budgetary accounts is typically used by a debt service fund? (Points : 5) Encumbrances Encumbrances Outstanding Estimated Uncollectible Accounts Appropriations (TCO G) Which of the statements concerning agency funds is a true statement? (Points : 5) Agency funds use the same basis of accounting as permanent funds. Agency funds are reported only on the statement of fiduciary net position. Agency funds use the temporary accounts—Additions and Deductions. Agency funds never receive cash. (TCO G) What basis of accounting helps maintain the original principal of a trust? (Points : 5) Cash basis Accrual basis Modified accrual basis Legal basis (TCO J) Which of the following items are typically reported differently between the governmental fund statements and the governmental activities column of the governmentwide statements? (Points : 5) Inventories Cash collected on property taxes receivable Capital outlays Accounts Payable and other accrued expenses (TCO J) GASB standards require that governmental fund financial statements include which of the following?(Points : 5)

� Balance Sheet

� Statement of activities

� Statement of cash flows Both A and B (TCO J) The government-wide financial statements required by GASB standards are a (Points : 5) statement of net position and statement of cash flows statement of net position, statement of activities, and statement of cash flows statement of activities and statement of cash flows statement of net position and statement of activities (TCO H) A condition whereby the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis is called a(an) (Points : 5) system design weakness. deficiency. unacceptable reportable condition.

audit alert item. (TCO H) Under FASB Standards, how would a not-for-profit organization recognize a conditional pledge? (Points : 5) It would disclose the amount of the conditional pledge in the notes to the financial statements. It would debit Pledges Receivable and credit Deferred Contributions. It would debit Pledges Receivable and credit Contributions—Temporarily Restricted. It would not recognize the conditional pledge until pledge conditions are substantially met. (TCO I) Which of the following items would not affect the amounts reported in the Revenues and Gains section of the statement of activities for a private college or university? (Points : 5) Student tuition and fees Net assets released from restriction Tuition and fees discounts and allowances Deferred revenues (TCO I) How would the estimated uncollectible tuition and fees be reported on the financial statements of a university? (Points : 5)

� It would be reported as part of net revenue by a public university.

� It would be reported as an operating expense by a public university.

� It would be reported as an operating expense by a private university. Both A and C are the proper recording methods of reporting estimated uncollectible tuition and fees. (TCO I) The primary source of revenues for most hospitals are (Points : 5) Investment income. Capitation fees from health maintenance organizations. Exchange transactions, such as fees for services. Nonexchange transactions, such as contributions. (TCO I) Colleges and universities often make loans to students. How would these loans be reported on the financial statements? (Points : 5) An expense A liability A receivable An investment (TCO I) Charity service and bad debts in a public hospital that follows business-type accounting are (Points : 5) both reported as deductions from gross patient revenue in arriving at net patient revenue. both reported as expenses reported differently, with charity service reported as a deduction from gross patient revenue and bad debts reported as an expense. reported differently, with charity service disclosed in the notes to the financial statements and bad debts reported as a deduction from revenue.