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Accounting Homework Assignment Ch 5 & 7 Problem

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Question;Chapter 5During the year the City of Hamburg engaged in the following transactions. The city uses theconsumption method of recording inventories and prepayments. The city has a 6/30 fiscal year end.REQUIRED: Record the following transactions related to supplies, prepaid items and fixed assetacquisitions.a. During the year the city purchased $600,000 of expendable supplies.b. On September 1 the city paid $360,000 for a three-year insurance policy to cover some assetsused in general government activities.c. On December 1 the city purchased four pickup trucks for general government activities. Thetrucks cost $100,000 in total.d. On January 1 the city leased some office equipment for use in the administrative offices. Thelease qualified as a capital lease. The present value of the minimum lease payments is $96,000.e. On April 1 the city leased a copying machine. The lease qualified as an operating lease. Theterms of the lease require yearly payments of $2,000 each April 1 for 5 years. The city prepaidthe entire five years of the lease.Chapter 7The City of Baconsville engaged in the following transactions. Assume that the city maintains itsbooks and records in a manner that facilitates the preparation of fund financial statements. Preparethe appropriate journal entries in the general fund. If appropriate, write ?No entry required.?a) The city purchased for cash three dump trucks for $80,000 each.b) The city sold for $4,000 a police car that had been purchased four years ago at a cost of $30,000.At the time of acquisition, the city estimated that the police car had a useful life of five years anda salvage value of $5,000.c) During the year, the city spent $12 million to build a third lane on both sides of the major northsouth highway through town.d) The city traded in a pickup truck used in general government operations for a new pickup truck,paying a difference of $18,000. The old pickup truck was purchased four years ago at a cost of$21,000. At the time it had an estimated useful life of five years and an estimated salvage valueof $6,000. At the time of the trade the old truck had a fair value of $10,000. The new truck has asticker price of $29,000.e) During the year the city began construction of a new city hall. By year-end, the city had madeprogress payments to the contractor of $3 million.f) The city received a gift of land from a citizen. The land is to be used to build a city park. Theland had been in the donor?s family since it was homesteaded. It had a fair value whencontributed of $2 million.

 

Paper#40042 | Written in 18-Jul-2015

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