Surrock City applied for a grant from the Federal Highway Administration (FHA). The City received notification that
Question:
Surrock City applied for a grant from the Federal Highway Administration (FHA). The City received notification that the grant had been awarded on March 31, 2014 of its fiscal year ended December 31, 2014. The grant provisions specified that the $20,000,000 grant would be received in two equal installments on October 15, 2014 and March15, 2015. The grant provisions also stipulated that qualifying maintenance expenditures on city roads were necessary prior to revenue recognition. For the following events, record the appropriate transactions in the general fund and the government-wide governmental activities (GWGA).
1.Record the necessary entry for notification of the grant award on March 31, 2014.
2.Record receipt of the first installment of the grant award on October 15, 2014.
3.Record qualifying road maintenance expenditures of $9,420,000 during fiscal year ended
December 31, 2014.
4.As of December 31, 2014, address any necessary revenue recognition issues.
5.As of December 31, 2014, record the necessary closing entries.
6.Record receipt of the second installment of the grant award on March15, 2015.
7.Record the expenditures of the necessary qualifying road maintenance expenditures
during 2015.
8.Address any remainingrevenue recognition issues in 2015.
Accounting for Governmental and Nonprofit Entities
ISBN: 978-0078025822
17th edition
Authors: Jacqueline Reck, Suzanne Lowensohn, Earl Wilson