16. C (Under the consumption method, the inventory is recorded when acquired
and then reclassified as an expenditure as consumed.)
fund financial statements as in the government-wide financial statements.)
21. A
25. D (Because the city has a liability in connection with this project, all amounts
must be recorded as with normal governmental fund transactions.)
28. A (The transfer occurred entirely within the Government Activities and
created no net impact on the total amounts reported.)
32. (5 Minutes) (Budgetary entries)
Beginning of Year-Recording of budget
GENERAL FUND
Estimated Revenues …………..……………….…..….….….…. 1,000,000
Estimated Other Financing Sources—Bond Proceeds 400,000
End of Year-Removal of budget
GENERAL FUND
Appropriations …………..………………….…..….….….….. 900,000
Appropriations-Other Financing Uses—Operating
33. (8 Minutes) (Order of a capital asset and subsequent receipt)
GOVERNMENT–WIDE FINANCIAL STATEMENTS
GOVERNMENT ACTIVITIES
Computer 89,400
Vouchers (or Accounts) Payable 89,400
As a result of the purchase and payment, capital assets have gone up by
the cost of the computer and cash has been reduced by the same amount.
FUND FINANCIAL STATEMENTS
GENERAL FUND
Encumbrances – Computer 88,000
Encumbrances Outstanding 88,000
Encumbrances Outstanding 88,000
Encumbrances – Computer 88,000
On the statement of revenues, expenditures, and other changes in fund
balance, an expenditure of $89,400 will be shown. Cash will also decrease
by that amount.
34. (10 Minutes) (Issuance of bond to finance construction project)
GOVERNMENT–WIDE FINANCIAL STATEMENTS
GOVERNMENT ACTIVITIES (Intra-activity transfer from the General Fund to
the Capital Projects Fund is not reported because Government Activities
totals are not affected.)
On the statement of net position, for the governmental activities, the
Buildings account goes up by $1,890,000, the Bonds Payable go up by $1.8
million, and cash goes down by $90,000.
FUND FINANCIAL STATEMENTS
To Record Transfer
GENERAL FUND
Other Financing Uses—Transfers Out 90,000
Cash 90,000
CAPITAL PROJECTS FUND
Cash 90,000
On the statement of revenues, expenditures, and other changes in fund
balance, the General Fund reports an other financing uses – transfer out of
35. (12 Minutes) (Reporting of fund balance amounts)
Fund-Balance—Nonspendable
—Prepaid items $ 7,000
—Supplies 5,000 $ 12,000
Fund-Balance—Restricted
—Cash from bond issuance $80,000
—Investments donated by citizen 33,000
Total Fund-Balance $305,000
The Fund-Balance—Unassigned amount ($25,000) was determined by taking the
36. (8 Minutes) (Reporting of commitments)
In the government-wide financial statements, the commitment for this computer
will not be formally reported because no liability has yet been incurred. A
disclosure note is likely to allow readers of the statements to understand that
these funds have been committed.
37. (20 Minutes) (Recording of basic journal entries)
FUND FINANCIAL STATEMENTS
a. General Fund
Estimated Revenues
Estimated Other Financing Sources
(Budgetary) Fund Balance
Appropriations
Expenditures – Computer
Vouchers Payable
e. General Fund
Vouchers Payable
Cash
f. General Fund
Other Financing Uses—Transfers Out—Capital Projects
Due to Capital Projects Fund (Special Assessment)
i. Special Revenue Fund
Cash
Grant Revenue Collected in Advance
j. Special Revenue Fund
Expenditures—Salaries
Cash
Grant Revenue Collected in Advance
Revenues—Grant
GOVERNMENT–WIDE FINANCIAL STATEMENTS
a. No entry
f. No entry (it is an intra-activity transfer within the governmental
activities)
g. No entry (assuming the internal service fund is treated as a
governmental activity so that this is an intra-activity transaction)
38. (16 Minutes) (Recording of basic journal entries)
FUND FINANCIAL STATEMENTS
a. General Fund
Encumbrances – Truck 94,000
Encumbrances Outstanding 94,000
d. General Fund
Other Financing Uses—Transfers Out—
Swimming Pool 140,000
Cash 140,000
Other Financing Sources—Transfers In 32,000
g. Special Revenue Fund
Cash 30,000
Unearned Grant Revenue 30,000
h. Special Revenue Fund
Unearned Grant Revenue 5,000
Revenues 5,000
GOVERNMENT–WIDE FINANCIAL STATEMENTS
a. No entry
b. No entry (Assuming print shop is a governmental activity.)
Unearned Grant Revenue 30,000
h. Governmental Activities
Expense—Public Service 5,000
Cash 5,000
Unearned Grant Revenue 5,000
Revenues 5,000
39. (15 Minutes) (Prepare basic journal entries)
FUND FINANCIAL STATEMENTS
a. Capital Projects Fund (could also be recorded in the General Fund
followed by a transfer into the Capital Projects Fund)
Cash 900,000
Other Financing Sources—Bonds Proceeds 900,000
d. General Fund
Encumbrances Outstanding 11,800
Encumbrances – Equipment 11,800
Expenditures Control—Machinery and Equipment 12,000
Vouchers Payable 12,000
g. General Fund
Taxes Receivable 600,000
Revenues – Property Taxes 576,000
Allowance for Uncollectible Current Taxes 24,000
GOVERNMENT–WIDE FINANCIAL STATEMENTS
a. Governmental Activities
Cash 900,000
Bonds Payable 900,000
b. No entry (commitments are not recorded)
f. Governmental Activities
Grant Receivable 90,000
Unearned Grant Revenue 90,000