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Accounting questions




Question;5-7The Village of Harris issued $5,000,000 in 6 percent general obligation, tax-supported bonds on July 1, 2008, at 101. A fiscal agent is not used. Resources for principal and interest payments are to come from the General Fund. Interest payment dates are December 31 and June 30. The first of 20 annual principal payments is to be made June 30, 2009. Harris has a calendar fiscal year.1. A capital projects fund transferred the premium ($50,000) to the debt service fund.2. On December 31, 2008, funds in the amount of $150,000 were received from the General Fund and the first interest payment was made.3. The books were closed for 2008.4. On June 30, 2009, funds in the amount of $350,000 were received from the General Fund, and the second interest payment was made along with the first principal payment ($250,000).5. On December 31, 2009, funds in the amount of $142,500 were received from the General Fund and the first interest payment was made.6. The books were closed for 2009.a. Prepare journal entries to record the events above in the debt service fund.b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the debt service fund for the year ended December 31, 2008.5-10On July 1, 2008, a five-year agreement is signed between the City of Genoa and the Computer Leasing Corporation for the use of computer equipment not associated with proprietary funds activity. The cost of the lease, excluding executory costs, is $15,000 per year. The first payment is to be made by a capital projects fund at the inception of the lease. Subsequent payments, beginning July 1, 2009, are to be made by a debt service fund. The present value of the lease payments, including the first payment, is $68,189. The interest rate implicit in the lease is 5 percent.a. Assuming the agreement meets the criteria for a capital lease under the provisions of SFAS No. 13, make the entries required in (1) the capital projects fund and (2) the debt service fund on July 1, 2008, and July 1, 2009.b. Comment on where the fixed asset and long-term liability associated with this capital lease would be recorded and the impact of the journal entries recorded for a.6-3Why might it be desirable to operate enterprise funds at a profit?6-10The Village of Parry reported the following for its Print Shop Fund for the year ended April 30, 2009.VILLAGE OF PARRY?PRINT SHOP FUNDStatement of Revenues, Expenses, and Changes in Net Assets For the Year Ended April 30, 2009Operating revenues: ? ?? Charges for services ? $1,000,000Operating expenses: ? ?? Salaries and benefits $500,000 ?? Depreciation 200,000 ?? Supplies used 200,000 ?? Utilities 70,000 970,000Income from operations ? 30,000Nonoperating income (expenses): ? ?? Interest revenue 30,000 ?? Interest expense (50,000) (20,000)Net income before transfers ? 10,000Transfers in ? 180,000? Changes in net assets ? 190,000? Net assets?beginning ? 1,120,000? Net assets?ending ? $1,310,000The Print Shop Fund records also revealed the following:1. Contribution from Water Utility Fund for working capital needs ? $ 80,0002. Contribution from General Fund for purchase of equipment ? 100,0003. Loan from Water Utility Fund for purchase of equipment ? 300,0004. Purchase of equipment ? (450,000)5. Purchase of one-year investments ? (100,000)6. Paid off a bank loan outstanding at May 1, 2008 ? $50,000? Paid interest ? $1,000? The loan was for short-term operating purposes. ? ?7. Signed a capital lease on April 30, 2009 ? $42,180The following balances were observed in current asset and current liability accounts. () denote credit balances:? 5/1/08 4/30/09Cash $151,000 $233,000Accrued interest receivable 5,000 10,000Due from other funds 40,000 50,000Accrued salaries and benefits (20,000) (30,000)Utility bills payable (4,000) (5,000)Accounts payable (30,000) (25,000)Accrued interest payable (5,000) (7,000)Prepare a Statement of Cash Flows for the Village of Parry Print Shop Fund for the Year Ended April 30, 2009. Include the reconciliation of operating income to net cash provided by operating activities.7-6On July 1, 2008, the City of Belvedere accepted a gift of cash in the amount of $3,000,000 from a number of individuals and foundations and signed an agreement to establish a private-purpose trust. The $3,000,000 and any additional gifts are to be invested and retained as principal. Income from the trust is to be distributed to community nonprofit groups as directed by a Board consisting of city officials and other community leaders. The agreement provides that any increases in the market value of the principal investments are to be held in trust, if the investments fall below the gift amounts, then earnings are to be withheld until the principal amount is reestablished.a. The following events and transactions occurred during the fiscal year ended June 30, 2009. Record them in the Belvedere Community Trust Fund.a. On July 1, the original gift of cash was received.b. On July 1, $2,000,000 in XYZ Company bonds were purchased at par plus accrued interest. The bonds pay an annual rate of 6 percent interest semiannually on April 1 and October 1.c. On July 2, $950,000 in ABC Company common stock was purchased. ABC normally declares and pays dividends semiannually, on January 31 and July 31.d. On October 1, the first semiannual interest payment was received from XYZ Company. Note that part of this is for accrued interest due at the time of purchase, the remaining part is an addition that may be used for distribution.e. On January 31, 2009, a cash dividend was received from ABC Company in the amount of $19,000.f. On March 1, the ABC stock was sold for $960,000. On the same day, DEF Company stock was purchased for $965,000.g. On April 1, the second semiannual interest payment was received from XYZ Company.h. During the month of June, distributions were approved by the Board and paid in cash in the amount of $95,000.i. Administrative expenses were recorded and paid in the amount of $12,000.j. An accrual for interest on the XYZ bonds was made as of June 30, 2009.k. As of June 30, 2009, the fair value of the XYZ bonds, exclusive of accrued interest, was determined to be $2,002,000. The fair value of the DEF stock was determined to be $960,000.l. Closing entries were prepared.b. Prepare, in good form, (1) a Statement of Fiduciary Net Assets and (2) a Statement of Changes in Fiduciary Net Assets for the Belvedere Community Trust Fund.


Paper#42862 | Written in 18-Jul-2015

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