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P2-2 (Transaction Analysis) Follow this example...

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Solution..


Question

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

 

responses.)

 

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,

 

$500,000.

 

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-2016

Price : $16
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