Questions and Answers of Modern Advanced Accounting

Use the same information as in (8). What amount of depreciation expense will Reynolds report in its government-wide financial statements for 2020?a. Zerob. $52,581c. $100,000d. $112,581
Use the same information as in (8). What is the total amount of expenditures that Webster will report on its fund financial statements for the governmental funds for 2020?a. $112,581b. $136,954c.
Use the same information as in (8). What liability balance will Webster report on its governmentwide financial statements on December 31, 2020?a. $463,048b. $487,419c. $511,790d. $517,419
Reynolds County has three large trucks with a total net book value of $600,000 and remaining lives of six years with no expected residual value. County officials lease the trucks to the City of
The accountants for a city are attempting to determine the proper reporting for a new transaction so that financial statements will be in conformity with U.S. generally accepted accounting
In governmental accounting, what is the difference between an acquisition and a merger? What differences exist between the accounting for an acquisition and for a merger?
For a state or local government, what is the difference between program revenues and general revenues? Why is that distinction important?
The Willingham Museum qualifies as a component unit of the City of Willingham. How does an activity or function meet the requirements to be deemed a component unit of a primary government?
What effect does application of the modified approach have on reporting within the government-wide financial statements?
What does a state or local government normally include in its management’s discussion and analysis (MD&A)? Where does a state or local government present this information?
A city believes its new landfill will fill to capacity gradually over a 10-year period. At the end of the first year of operations, the landfill is only 7 percent filled. How much liability for
Pittston County has an empty school building with a net book value of $700,000 and a remaining life of 10 years with no expected residual value. The building is leased to the City of Lincoln at the
Why does the operation of a solid waste landfill create significant reporting concerns for many local governments?
At the start of Year 1, the City Peacock leases 30 computers for use by various officials in school administration and public safety at a total cost of $90,000 per year. The first lease payment is
A teacher employed by the City of Lights qualifies for a defined benefit pension plan. The city sets up a pension trust fund to monitor the resources held for these future payments. How is the amount
The accountants for a city government are attempting to determine the appropriate method of reporting a series of unique financial transactions. They review all of the authoritative sources of United
Authoritative US. GAAP for state and local governments is divided into two categories, with the first category having more authority than the second. What sources of U.S. GAAP are found in both of
The City of Bainland has been undergoing financial difficulties because of a decrease in its tax base caused by corporations leaving the area. On January 1, 2020, the city has a fund balance of only
In 2020, the City of Coyote receives a $320,000 cash grant from the state to reduce air pollution. Although a special revenue fund could have been set up, the money remains in the general fund. The
During 2020, the City of Coyote received $10,000, which was recorded as a general revenue in the general fund. It was actually a program revenue earned by the city’s park program.a. What was the
The City of Coyote mails property tax bills for 2021 to its citizens during August 2020. Payments could be made early to receive a discount. The levy becomes legally enforceable on February 15, 2021.
The City of Coyote mails property tax bills for 2021 to its citizens during August 2020. Property owners could make payments early to receive a discount. The levy becomes legally enforceable on
The City of Coyote records an art display within its general fund. The display generates revenues of $9,000 this year as well as expenditures of $45,000 ($15,000 in expenses and $30,000 to buy land
On December 30, 2020, the City of Coyote borrows $20,000 for the general fund on a 60-day note. In that fund, the city records Cash and Other Financing Sources. In the general information, this city
During 2020, the City of Coyote contracts to build a bus stop for schoolchildren costing $10,000 as a special assessments project. The city collects $10,000 from directly affected citizens. The
The following are transactions of the City of Grayson. Indicate how each of the following transactions affects the fund balance of the general fund, and its classifications, for fund financial
On December 1, 2020, a state government awards a city government a grant of $1 million to be used specifically to provide hot lunches for all schoolchildren. No money is received until June 1, 2021.
Government officials of the City of Johnson expect to receive general fund revenues of $400,000 in 2020 but approve spending only $380,000. Later in the year, as they receive more information, they
The following transactions relate to the general fund of the city of Lost Angels for the year ending December 31, 2020. Prepare a statement of revenues, expenditures, and other changes in fund
A city has only one activity, its school system. The school system is accounted for within the general fund. For convenience, assume that, at the start of 2020, the school system and the city have no
The following trial balance is taken from the General Fund of the City of Jennings for the year ending December 31, 2020. Prepare a condensed statement of revenues, expenditures, and other changes in
Following are descriptions of transactions and other financial events for the City of Tetris for the year ending December 2020. Not all transactions have been included here. Only the general fund
A city transfers cash of $90,000 from its general fund to start construction on a police station. The city issues a bond at its $1.8 million face value. The police station is built for a total cost
The board of commissioners of the City of Hartmoore adopts a general fund budget for the year ending June 30, 2020. It includes revenues of $1,000,000, bond proceeds of $400,000, appropriations of
A city transfers cash of $20,000 from its general fund to an enterprise fund to pay for work done by the enterprise fund for the school system. What is reported on the city’s fund financial
A city transfers cash of $20,000 from its general fund to an enterprise fund to pay for work performed by the enterprise fund for the school system. How does the city report this transfer on its
A county transfers cash of $60,000 from its general fund to a debt service fund. What is reported on the county’s fund financial statements?a. No reporting is made.b. Other Financing Sources
A town transfers cash of $60,000 from its general fund to a debt service fund. What does the town report in its government-wide financial statements?a. No reporting is made.b. Other Financing Sources
Which of the following is an example of an interactivity transaction?a. A city transfers money from the general fund to a debt service fund.b. A city transfers money from a capital projects fund to
A city issues a 60-day tax anticipation note to fund operations until the collection of sufficient tax money. How does the city record this liability?a. The liability should be reported in the
The state government passes a law requiring all localities to upgrade their water treatment facilities. The state then awards a grant of $500,000 to the Town of Midlothian to help pay for the
At the end of the current year, a government reports $9,000 as a fund balance—assigned in connection with an encumbrance. What information does this balance convey?a. A donor has given the
Which of the following statements is true concerning the recording of a budget?a. At the beginning of the year, a debit is made to Appropriations.b. A debit to the Budgetary Fund Balance account
During the current year, the City of Jones buys land for $80,000. Which of the following is not a possibility?a. The land could be reported as an asset by the business-type activities in the
A citizen donates investments valued at $22,000 to the City of Townsend. The citizen stipulates that the investments be held. Any resulting income must be used to help maintain the city’s cemetery.
In government-wide financial statements, how do intra-activity and interactivity transactions differ? How does a state or local government report each type of transaction?
How does a state or local government report interfund transfers in the fund financial statements for the governmental funds?
What is a special assessment project? Describe the reporting of a special assessment project.
How is the issuance of a long-term bond reported on fund financial statements for a governmental fund? How is the issuance of a long-term bond reported on government-wide financial statements?
When does a government recognize a receivable for property tax assessments? When is the associated revenue recognized?
What are the two different ways that a state or local government can report the cost and use of supplies and prepaid items on fund financial statements for governmental funds?
At what point does a governmental fund report an expenditure?
What is an encumbrance? When is an encumbrance recorded? What happens to this balance? How are encumbrances reported in government-wide financial statements?
Why are budgetary entries recorded in several of the individual funds of a state or local government?
Fund financial statements have separate columns for each activity. Which activities are reported individually in this manner?
What are the five fund types within the governmental funds? What events do each of these five fund types report?
What are the three categories of funds? What funds are included in each of these three categories?
In applying the current financial resources measurement focus, when are liabilities recognized in fund financial statements for the governmental funds?
How has the dual system of financial statements affected the financial reporting of state and local governments?
How have users’ needs impacted the development of accounting principles for the reporting of state and local government units?
You have been engaged to do the accounting for the termination and liquidation of the Miller, Smith, and Tavares partnership. Miller has requested an immediate distribution of cash from the
One of your colleagues has been hired by the Todd, Johnson, and Samuels partnership to guide it through the liquidation process. The partnership currently has cash in a bank account that exceeds the
Go to the website www.cedarfair.com and click on “Investors,” then “Investor Information,” “Financial Reports,” and “Annual Reports.” Then click on “2017 Annual Report on 10-K” to
Following is a series of independent cases. In each situation, indicate the cash distribution to be made to partners at the end of the liquidation process. Unless otherwise stated, assume that all
On January 1, the partners of Van, Bakel, and Cox (who share profits and losses in the ratio of 5:3:2, respectively) decide to terminate operations and liquidate their partnership. The trial balance
The Simpson, Hart, Bobb, and Reidel partnership has terminated operations and is undergoing liquidation. Sales commissions and other liquidation expenses are expected to total $19,000. The
The following balance sheet is for a partnership in which the partners have decided to terminate operations and liquidate assets. The partners estimate liquidation expenses will be $10,000.Prepare a
A local dental partnership has been liquidated and the final capital balances areAtkinson, capital (40% of all profits and losses) . . . . . . . . . . . . . . $ 70,000Kaporale, capital (30%) . . . .
A partnership has the following account balances at the date of termination: Cash, $80,000; Noncash Assets, $660,000; Liabilities, $320,000; Bell, capital (50 percent of profits and losses),
When a partnership is liquidated, how is the final distribution of partnership cash made to the partners?a. Equallyb. According to the profit and loss ratioc. According to the final capital account
How are safe payments to partners calculated when cash becomes available for distribution?
What is the purpose of a statement of partnership liquidation? What information does it convey to its readers?
What is the difference between the termination of a partnership and the liquidation of partnership property?
Steve Reese is a well-known interior designer in Fort Worth, Texas. He wants to start his own business and convinces Rob O’Donnell, a local merchant, to contribute the capital to form a
A partnership of attorneys in the St. Louis, Missouri, area has the following balance sheet accounts as of January 1, 2021:According to the articles of partnership, Athos is to receive an allocation
Kimble, Sykes, and Gerard open an accounting practice on January 1, 2019, in Chicago, Illinois, to be operated as a partnership. Kimble and Sykes will serve as the senior partners because of their
Gorman and Morton form a partnership on May 1, 2019. Gorman contributes cash of $50,000; Morton conveys title to the following properties to the partnership:The partners agree to start their
In the early part of 2021, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2020 but had never used an accountant’s services.
On January 1, 2020, the dental partnership of Angela, Diaz, and Krause was formed when the partners contributed $30,000, $58,000, and $60,000, respectively. Over the next three years, the business
Purkerson, Smith, and Traynor have operated a bookstore for a number of years as a partnership. At the beginning of 2021, capital balances were as follows:Purkerson . . . . . . . . . . . . . . . . .
The partnership agreement of Jones, King, and Lane provides for the annual allocation of the business’s profit or loss in the following sequence:Jones, the managing partner, receives a bonus equal
The Prince-Robbins partnership has the following capital account balances on January 1, 2021:Prince, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . $70,000Robbins, Capital . . . . . .
A partnership begins its first year with the following capital balances:Alexander, Capital . . . . . . . . . . . . . . . . . . . . . . . . $ 90,000Bertrand, Capital . . . . . . . . . . . . . . . . .
Patrick has a capital balance of $120,000 in a local partnership, and Caitlin has a $90,000 balance. These two partners share profits and losses by a ratio of 60 percent to Patrick and 40 percent to
A partnership has the following capital balances with partners’ profit and loss percentages indicated parenthetically:Burks (35%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A partnership has the following capital balances with partners’ profit and loss percentages indicated parenthetically:Henry (50%) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
How does partnership accounting differ from corporate accounting?a. The matching principle is not considered appropriate for partnership accounting.b. Revenues are recognized at a different time by a
Read several of the following articles as well as any other published pieces that describe the work of the accountant in bankruptcy cases:Restructuring for a Positive Return,” CMA Management,
Go to the following story about the bankruptcy filing of Sears Holdings Corp., https://www.cnbc.com/2018/10/15/sears-files-for-bankruptcy.html. Search for other stories about the bankruptcy of Sears
An investment analyst has been studying the long-term prospects of Six Flags Entertainment Corporation and has asked for assistance. Go to www.sixflags.com and click on “Investors” at the top of
Use the trial balance presented for Lynch, Inc., in problem (51). Assume that the company will be liquidated and the following transactions will occur:Accounts receivable of $18,000 are collected
Lynch, Inc., is a hardware store operating in Boulder, Colorado. Management recently made some poor inventory acquisitions that have loaded the store with unsalable merchandise. Because of the drop
Becket Corporation’s accountant has prepared the following balance sheet as of November 10, 2020, the date on which the company is to release a plan for reorganizing operations under Chapter 11 of
The following balance sheet has been produced for Litz Corporation as of August 8, 2020, the date on which the company is to begin selling assets as part of a corporate liquidation:The following
The following balance sheet has been prepared by the accountant for Limestone Company as of June 3, 2020, the date on which the company is to file a voluntary petition of bankruptcy:Additional
Smith Corporation has gone through bankruptcy and is ready to emerge as a reorganized entity on December 31, 2020. On this date, the company has the following assets (fair value is based on
Ristoni Company is in the process of emerging from a Chapter 11 bankruptcy. It will apply fresh start accounting as of December 31, 2020. The company currently has 30,000 shares of common stock
Jaez Corporation is in the process of going through a reorganization. As of December 31, 2020, the company’s accountant has determined the following information although the company is still
Shi Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $26,200 in free cash. The following debts, totaling $43,050, remain:Government
How should a company emerging from bankruptcy reorganization report its liabilities (other than deferred income taxes)?a. At their historical valueb. At zero because of fresh start accountingc. At

Showing 500 - 600 of 1393