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Jackson County Hospital
Statement of Revenues, Expenses, and Changes in Net Position
For the Year Ended December 31, 20X0
** Calculations: Patient service charges ($18,000) less charity service ($500) less contractual
adjustments ($1,100) less uncollectible accounts ($710).
***Calculations: Net investment in capital assets, January 1 ($15,000) plus Restricted net
position, January 1 ($3,200) plus Unrestricted net position, January 1 ($9,000).
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Governmental and Nonprofit Accounting: Theory and Practice, 10e (Freeman)
Problems – Chapter 19
Problem 1 – Federal Accounting Journal Entries
The following transactions and events were selected from a federal agency. All amounts are in
millions of dollars.
Transactions:
1. Received a warrant from Treasury for its appropriation for the fiscal year, $300.
2. The OMB apportioned $80 to the agency.
3. The agency head allotted $79 to specific purposes.
4. Preliminary requests were made within the agency for the purchase of $8 in supplies.
5. Purchase orders were approved and placed for the $8 of supplies requested.
6. Salaries of $40 were paid to agency employees.
7. Equipment with an estimated cost of $17 was ordered.
8. The equipment was received along with an invoice for its $17 cost.
Requirement: Prepare the entries a federal agency should make to record these transactions and
events.
Answers:
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# Accounts Debit Credit
1a Fund Balance with Treasury 300
Unexpended Appropriations 300
Problem 2 – Federal Financial Management Environment
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Requirements: Compare and contrast the financial management responsibilities of:
A. Department of the Treasury
B. Office of Management and Budget
C. Government Accountability Office
D. Federal Accounting Standards Advisory Board
Answers:
A. The Department of the Treasury is part of the executive branch of the government. It is
B. Office of Management and Budget (OMB) is an agency within the Executive Office of
C. Government Accountability Office (GAO) is headed by the Comptroller General of the
D. Federal Accounting Standards Advisory Board (FASAB) is an independent agency
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Governmental and Nonprofit Accounting: Theory and Practice, 10e (Freeman)
Problems – Chapter 20
Problem 1 – Single Audit Essay #1
Answer the following questions related to the single audit.
1. Explain the concept of a single audit.
2. What is a major federal program? Why does it matter if a federal assistance program is a
major program?
3. What is a low-risk auditee, and what is the impact of being a low-risk auditee?
Answers:
1. The concept underlying a single audit is that one audit should meet multiple objectives,
including:
2. A major federal program is essentially a federal program which has been selected using
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3. A low-risk auditee is an entity that has had single audits performed for each of the
Problem 2 – Single Audit Essay #2
Requirement: Explain the process for identifying major federal programs in a single audit of a
government that receives federal financial assistance.
Answer:
Identifying major programs requires a multiple step process.
First, the auditor identifies the larger federal programs, which are called Type A programs. For
Type A programs are major programs unless the auditor excludes them because they are low-risk.
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Problem 3 – Identifying Major Programs
A local government received and expended the following federal financial assistance under
several programs during 20X4:
Program A $100,000
Program B 200,000
Program C 250,000
Program D 475,000
Program E 625,000
Program F 500,000
Program G 600,000
Total $2,750,000
Requirements:
A. Is this government required to have a single audit? Why?
B. If a single audit is performed on the government, what are its Type A programs?
C. Assume that the two largest Type A programs that you identified in Part B of this question
were audited as major federal financial assistance programs in one of the past two years
and that the audits uncovered no findings or questioned costs. Further assume that each
of the Type B programs could reasonably be assessed as high-risk programs. Which
programs should be audited as major programs? Why?
Answers:
B. The Type A programs are defined as federal programs with federal awards expended during
C. Programs D and F must be treated as major. Programs B and C are the most likely to be
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risk auditee.
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