Question

The bookkeeper for the community of Spring Valley has asked for your assistance regarding the following items.

Required
Prepare a memo discussing the proper accounting and financial reporting in the general fund for each of the following items.
a. Property taxes receivable are recognized at the levy date. One percent of the levy is not expected to be collected.
b. Spring Valley collects property taxes in advance of the year in which they are expendable.
c. Spring Valley receives sales tax revenues from the state, but the state still owes the city another $15,000 that will not be received until the next month.
d. Spring Valley receives an unexpected state grant to finance the purchase of fire prevention equipment. One-half of the grant is expended in this fiscal period, and the remainder is expected to be expended in the next fiscal period.
e. Interest is earned on short-term investments made from the general fund's resources.
f. A gift from a local citizen was given to be used for a new city park once it has been completed. If the park is not constructed within two years, the gift must be returned to the grantor. The park's completion is expected in the next fiscal period.



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  • CreatedMay 23, 2014
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