Follow this example for each transaction.
Example: Cash received for licenses during 20X1, $8,000.
Answer: Governmental Funds Gen Cap. Assets & Gen. Longterm Liabilities
Fund Financial Assets- Liabilites= Fund Balance GCA- GLTL= Net Assets
General Fund FA= ($8,000)- RL= FB= ($8,000) 0-0-0
a. Analyze the effects of the following transactions on the accounting equations of the
various funds and nonfund accounts of a state or local government. (For any borrowing
transactions, reflect any necessary year end interest accruals in your
b. Indicate how each transaction would be reported in the operating statement for
each fund affected. Be sure to identify the fund and the operating statement.
1. A government incurred and paid salaries for general government employees,
2. A government purchased a truck for $38,000 cash for the use of a general government
department that is financed from restricted taxes that can be used only
to support that department’s programs.
3. A government issued $5,000,000 of 6%, 10-year bonds to help finance expansion
of a facility used by one of its public utility operations. The bonds were issued at
par 3 months before year end and pay interest annually.
4. A government issued a 9-month, 10% note payable for $50,000. The note was
issued 6 months before the end of the fiscal year to provide financing for various
programs that are financed primarily from general tax revenues.
5. A government issued general obligation bonds at par, $15,000,000, to finance
construction of a new school building. The bonds bear interest at 8%, payable
annually, and were dated and issued 6 months before the end of the year.
6. The government purchased land for the site of the school, $185,000.
7. The government incurred and paid construction costs on the school building,
which was completed during the year, $14,715,000.
8. The government’s governing body ordered that the unused school bond proceeds
be set aside for paying principal and interest on the bonds, and those resources
were set aside in the appropriate fund.
9. $1,500,000 of general tax revenues were paid over to the fund to be used to pay
principal and interest on the school bonds.
10. The first annual interest payment on the school bonds came due and was paid.
11. The 9-month note (from item 4) was repaid with interest when due.
12. The government-owned public utility sold services to the public on account,
$1,000,000; no uncollectibles are expected.
13. The government-owned public utility sold services to other departments of the
government, $110,000.The other departments have paid all but $10,000.
14. The government sold a police department computer for $4,000. Its original cost
(3 years earlier) was $15,000. At the time of purchase the computer was expected
to be used for 4 years and have a $7,000 residual value.
15. The government paid $100,000 principal and $10,000 interest on a long-term note
that came due midway through the year.
Paper#9626 | Written in 27-Jan-2016Price : $16