Question: Analyze each of the following scenarios Provide a brief explanation

Analyze each of the following scenarios. Provide a brief explanation of your analysis and answers to each one.
a. A governmental unit acquired land, buildings, other improvements, and certain equipment for a single lump-sum purchase price. How should the portion of the total cost attributable to various assets be determined?
b. A municipality was granted certain land for use as a playground. The property was appraised at $400,000 at the time of the grant. Subsequently, all land in the neighborhood rose in value by 30%. Should the increase be reflected in the GCA accounts? Why or why not?
c. An asset originally financed by Special Revenue Fund revenues and accounted for in the General Capital Assets accounts was sold. To which fund would you credit the proceeds and why?
d. Assume that the asset referred to in the preceding question was financed through special assessment bonds of the government. To which fund should the proceeds from the sale of this asset be credited? Briefly explain.
e. Near the end of 20X5, a city purchased an automobile at a cost of $15,000. The uninsured vehicle was wrecked during 20X6 (the vehicle’s accumulated depreciation at the time of the wreck was $2,000) and sold for salvage for $1,000. If the automobile were purchased from General Fund resources and the salvage proceeds were also recorded there, what entries would be made in 20X5 and 20X6 to reflect these facts? What amount would be reported in the government-wide Statement of Activities?

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  • CreatedOctober 25, 2014
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