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26. A city starts a solid waste landfill during 2010. When the landfill was
opened the city estimated that it would fill to capacity within 5 years and that the
cost to cover the facility would be $1.5 million which will not be paid until the
facility is closed. At the end of 2010, the facility was 20% full, and at the end of
2011 the facility was 45% full. On government-wide financial statements, which
of the following are the appropriate amounts to present in the financial
statements for 2011?
27. A city starts a solid waste landfill during 2010. When the landfill was
opened the city estimated that it would fill to capacity within 5 years and that the
cost to cover the facility would be $1.5 million which will not be paid until the
facility is closed. At the end of 2010, the facility was 20% full, and at the end of
2011 the facility was 45% full. If the landfill is judged to be a governmental fund,
what liability is reported on the fund financial statements at the end of 2011?
28. The employees of the City of Raymond earn vacation compensation that
totals $1,500 per week. During 2011, $30,000 in vacation time was taken and the
remainder is expected to be used during the latter part of next year. In the
government-wide financial statements, assuming there was no beginning
balance, what liability should be reported at the end of 2011?
29. The employees of the City of Raymond earn vacation compensation that
totals $1,500 per week. During 2011, $30,000 in vacation time was taken and
$48,000 is expected to be used during the latter part of next year. On fund
financial statements, what liability should be reported at the end of 2011?
30. The Town of Conway opened a solid waste landfill in 2001 that is now
filled to capacity. The city initially anticipated closure costs of $2 million. These
costs were not expected to be incurred until the landfill is closed. What is the
final journal entry to record these costs assuming the estimated $2 million
closure costs were properly recorded and the landfill is accounted for in an
enterprise fund?
31. What three criteria must be met to identify a governmental unit as a
primary government?
32. What three criteria must be met before a governmental unit can elect to
not capitalize and therefore report a work of art or historical treasure as an
asset?
33. What are the three broad sections of a state or local government's CAFR?
34. What information is required in the introductory section of a state or local
government's CAFR?
35. What information is required in the financial section of a state or local
government's CAFR?
36. What is meant by the term fiscally independent?
37. What is meant by the term legally independent?
38. How is the Statement of Cash Flows for Proprietary Funds similar and
dissimilar to a Statement of Cash Flows for a for-profit business?
39. The City of Wetteville has a fiscal year ending June 30. Examine the
following transactions for Wetteville:
(A.) On 6/1/11, Wetteville enters into a 5-year lease on a copying machine. The
lease meets the criteria of a capital lease and carries an implied interest rate of
10%. The copier has a present value of $2,300. Wetteville has to put a $300 down
payment on the lease at the beginning of the lease with monthly payments
thereafter of $42.49.
(B.) On 6/5/11, Wetteville opens a new landfill. The engineers estimate that at
the end of 10 years the landfill will be full. Estimated costs to close the landfill
are currently at $3,500,000.
(C.) On 6/15/11, the end of the two-week pay period, Wetteville has $20,000 in
accrued vacation pay related to the payroll for the period. The city estimates that
$5,000 of this pay will be taken by the end of this summer and the rest will be
used next summer.
(D.) On 6/18/11, Wetteville receives a donation of a vintage railroad steam
engine. The engine will be put on display at the local town park. A fee will be
charged to actually climb up into the engine. The engine has been valued at
$500,000.
(E.) On 6/30/11, Wetteville makes its first payment on the leased copier. The
$42.49 payment includes $16.68 interest.
(F.) On 6/30/11, Wetteville estimates that the landfill is 2% filled.
Required:
Prepare the journal entries for the above transactions in the general fund, on the
dates mentioned for each lettered item, for the purposes of preparing the fund
financial statements.
40. The City of Wetteville has a fiscal year ending June 30. Examine the
following transactions for Wetteville:
(A.) On 6/1/11, Wetteville enters into a 5-year lease on a copying machine. The
lease meets the criteria of a capital lease and carries an implied interest rate of
10%. The copier has a present value of $2,300. Wetteville has to put a $300 down
payment on the lease at the beginning of the lease with monthly payments
thereafter of $42.49.
(B.) On 6/5/11, Wetteville opens a new landfill. The engineers estimate that at
the end of 10 years the landfill will be full. Estimated costs to close the landfill
are currently at $3,500,000.
(C.) On 6/15/11, the end of the two-week pay period, Wetteville has $20,000 in
accrued vacation pay related to the payroll for the period. The city estimates that
$5,000 of this pay will be taken by the end of this summer and the rest will be
used next summer.
(D.) On 6/18/11, Wetteville receives a donation of a vintage railroad steam
engine. The engine will be put on display at the local town park. A fee will be
charged to actually climb up into the engine. The engine has been valued at
$500,000.
(E.) On 6/30/11, Wetteville makes its first payment on the leased copier. The
$42.49 payment includes $16.68 interest.
(F.) On 6/30/11, Wetteville estimates that the landfill is 2% filled.
Required:
Prepare the journal entries for the above transactions, on the dates mentioned
for each lettered item, for the purposes of preparing the government-wide
financial statements.
