Capital Assets: Chapter 4 Solutions

Only available on StudyMode
  • Download(s) : 112
  • Published : March 4, 2013
Open Document
Text Preview
CHAPTER 4:ACCOUNTING FOR GOVERNMENTAL OPERATING ACTIVITIES ( ILLUSTRATIVE TRANSACTIONS AND FINANCIAL STATEMENTS Solutions to Exercises and Problems

4-2.1. a. 6. a.
2. c. 7. c.
3. d. 8. c.
4. b. 9. b.
5. d.10. b.
Ch. 4, Solutions (Cont’d)

4-3. a. Calculation of Estimated Required Tax Anticipation Financing

Estimated Expenditure Requirements:
Budgeted expenditures, remainder of FY 2011$2,470,000
Current liabilities payable 830,000$3,300,000

Estimated Resources Available:
Cash on hand, April 1, 2011 740,000
Collections of budgeted FY 2011 revenues
and delinquent property taxes, including
interest and penalties 1,100,000 1,840,000

Estimated Amount of Required Tax
Anticipation Note Financing$1,460,000

b. General Fund and Governmental Activities:DebitsCredits CASH1,460,000
TAX ANTICIPATION NOTES PAYABLE1,460,000

b. General Fund:
TAX ANTICIPATION NOTES PAYABLE1,460,000
EXPENDITURES—201136,500
CASH1,496,500

Governmental Activities:
TAX ANTICIPATION NOTES PAYABLE1,460,000
EXPENSES—INTEREST ON TANs36,500
CASH1,496,500

(Note: Interest on notes is $1,460,000 X .05 X 6/12
=$36,500)

4-4. a.Revenues = levy – (.02 X levy) = .98 X levy = $2,660,000

Levy = $2,660,000 ÷ .98 = $2,714,286 (rounded to nearest dollar)

Rate X (assessed valuation ÷ 100) = levy

Rate = levy ÷ (assessed valuation ÷ 100)

Rate = $2,714,286 ÷ 1,357,143 = $2.00 per $100 of assessed valuation

DebitsCredits

b.TAXES RECEIVABLE—CURRENT 2,714,286
ESTIMATED UNCOLLECTIBLE CURRENT TAXES54,286
REVENUES2,660,000

c.CASH 2,540,000
TAXES RECEIVABLE—CURRENT2,540,000

TAXES RECEIVABLE—DELINQUENT174,286
TAXES RECEIVABLE—CURRENT174,286

ESTIMATED UNCOLLECTIBLE CURRENT TAXES54,286
ESTIMATED UNCOLLECTIBLE DELINQUENT
TAXES54,286

INTEREST AND PENALTIES RECEIVABLE10,457
ESTIMATED UNCOLLECTIBLE INTEREST
AND PENALTIES1,046
REVENUES9,411

4-5. a.General Fund:
INVENTORY OF SUPPLIES15,000
RESERVE FOR INVENTORY OF SUPPLIES15,000

Governmental Activities:
INVENTORY OF SUPPLIES15,000
EXPENSES (VARIOUS FUNCTIONS)15,000

(Note: Inventory consumed = Beginning
Inventory + Purchases – Ending inventory,
or $140,000 + $720,000 - $155,000 = $705,000.
This is the amount that expenses should
equal for the year.)

b.General Fund:
INVENTORY OF SUPPLIES15,000
EXPENDITURES15,000

FUND BALANCE15,000
RESERVE FOR INVENTORY OF SUPPLIES15,000

Governmental Activities:
Same as part a
Ch. 4, Solutions (Cont’d)

4-6.

a. (1) May 1, 2011DebitsCredits

DUE FROM STATE GOVERNMENT200,000
DEFERRED REVENUES200,000

(Note: There are no eligibility requirements stipulated in the grant. Thus, the grant can be recorded upon
notification. There are, however, time restrictions that half of the grant is to be used in each of the
2012 and 2013 fiscal years. Therefore, revenues
cannot be recognized until the period for which
use of the grant is intended.)

(2) July 1, 2011

CASH100,000
DUE FROM STATE GOVERNMENT100,000

DEFERRED REVENUES100,000
REVENUES100,000
(3) During FY 2012

EXPENDITURES90,000
VOUCHERS PAYABLE (or CASH)90,000

(4) July 1, 2012

Same entries as part (2).

4-7.
DADE CITY
GENERAL JOURNAL

DebitsCredits

APPROPRIATIONS6,224,000

ESTIMATED OTHER FINANCING USES2,776,000
ESTIMATED REVENUES7,997,000
BUDGETARY FUND BALANCE1,003,000
REVENUES7,980,000...
tracking img