1. Lomond City receives a federal grant to assist in nutrition programs for its senior citizens. The city will select the contractors that will provide meals and approve the participants in the program. The proceeds of this grant should be accounted for in which of the following funds of the city?

a. A governmental fund.

b. An enterprise fund.

c. An agency fund.

d. A private-purpose trust fund.

2. Dale City Light & Water (a proprietary fund) contributes to a defined benefit pension plan for its employees. During 2014, the city contributed $36 million to the pension plan. The city also made a $4 million contribution related to 2013. The actuarial determined contribution requirement for 2014 was $43 million. The amount of pension expense recognized by Dale City Light & Water for 2014 should be:

a. $ 0

b. $ 36 million

c. $ 40 million

d. $ 43 million

3. The Midwest Circulatory Diseases Society placed an advertisement in prominent publications in the region. The advertisement provided information about symptoms of the diseases and offered practical advice for controlling their immediate effects. The society’s accountants estimate that about 75 percent of the advertising copy was devoted to information about the disease and the remainder was an appeal for funds. The advertisement cost $20,000. Using the physical units method of separating joint costs, how much of the cost of the advertisement should be reported as program costs?

a. $20,000.

b. $15,000.

c. $10,000.

d. $5,000.

4. A public university had tuition and fees for the year ended June 30, 2012, in the amount of $27,000,000. Scholarships, for which no services were required, amounted to $2,100,000. Graduate assistantships, for which services were required, amounted to $1,950,000. The amount to be reported by the university as net tuition and fee revenue would be

a. $27,000,000

b. $25,050,000

c. $24,900,000

d. $22,950,000

5. During a particular year, a not-for-profit hospital provides services that at standard rates would be billed at $400 million. This amount includes $20 million of charity care. Of the remaining $380 million, the hospital estimates that $240 million will be billed to third-party providers which, per contractual agreements, will pay only 75 percent of the standard rate (i.e., $180 million). Of the $140 million to be billed to individuals, the hospital estimates that $80 million will have to be written off as bad debts. The hospital should recognized net patient care revenue of

a. $240 million

b. $320 million

c. $380 million

d. $400 million

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