Exam (elaborations)
ACG4501 EXAM 2 (Ch. 3, 4 & 5) questions and answers
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ACG4501 EXAM 2 (Ch. 3, 4 & 5) questions and answers
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ACG4501EXAM
2
(Ch.
3,
4
&
5)
$0
-
ANS-A
government
enters
into
a
capital
lease
for
the
purchase
of
a
new
snow
plow.
The
present
value
of
the
future
lease
payments
is
$845,500
and
there
is
a
down
payment
at
the
inception
of
the
lease
of
$25,000.
The
snow
plow
should
be
recorded
in
the
General
Fund
at
$0
-
ANS-The
following
items
were
included
in
Castle
City's
General
Fund
expenditures
for
the
year
ended
June.
Personal
computer
for
the
city
treasurer
$
6,000
Furniture
for
the
mayor's
office
$
20,000
How
much
should
be
classified
as
capital
assets
in
Castle
City's
General
Fund
balance
sheet
at
June
30?
$2,050,000
-
ANS-In
2017,
Sunrise
City
signed
a
contract
in
the
amount
of
$8,000,000
for
the
construction
of
a
new
city
hall.
Expenditures
were
$4,000,000
in
2017
and
$2,050,000
in
2018,
which
included
a
change
to
the
original
construction
design
in
the
amount
of
$50,000.
What
amount
should
be
added
to
capital
assets
in
the
governmental
activities
accounts
in
2018?
$6,250,000
-
ANS-The
following
general
capital
assets
were
owned
by
the
town
of
Otterville:
Town
Buildings:
$3,250,000
Intangible
Assets:
$1,000,000
Streets,
sidewalks,
and
water
lines:
$2,000,000
What
amount
should
be
recorded
as
capital
assets
in
the
town's
governmental
activities
accounts?
$870,500
-
ANS-A
government
enters
into
a
capital
lease
for
the
purchase
of
a
new
snow
plow.
The
present
value
of
the
future
lease
payments
is
$845,500
and
there
is
a
down
payment
at
the
inception
of
the
lease
of
$25,000.
The
snow
plow
should
be
recorded
in
the
government-wide
statement
of
net
position
at:
$900,000.
-
ANS-The
City
of
Oak
Park
constructed
a
new
storage
facility
using
the
city's
own
public
works
employees.
Construction
costs
were
incurred
in
the
amount
of
$900,000,
plus
$25,000
in
interest
on
short-term
notes
used
to
finance
construction.
What
amount
should
be
capitalized
in
the
government-wide
statements? 170,000+25,000+3,000=
198,000
-
ANS-Carroll
City
levies
$200,000
of
property
taxes
for
its
current
fiscal
year.
One
percent
of
the
tax
levy
is
expected
to
be
uncollectible.
The
city
collects
$170,000
of
its
taxes
during
the
year
and
another
$25,000
during
the
first
two
months
of
the
following
year.
In
addition,
the
city
collected
$3,000
of
prior
year
taxes
during
the
first
two
months
of
the
current
fiscal
year
and
another
$2,000
during
the
remainder
of
the
current
fiscal
year.
What
amount
of
property
tax
revenues
should
the
city
report
in
the
general
fund
financial
statements
for
the
current
fiscal
year?
170,000+25,000+3,000=
198,000
-
ANS-Carroll
City
levies
$200,000
of
property
taxes
for
its
current
fiscal
year.
One
percent
of
the
tax
levy
is
expected
to
be
uncollectible.
The
city
collects
$170,000
of
its
taxes
during
the
year
and
another
$25,000
during
the
first
two
months
of
the
following
year.
In
addition,
the
city
collected
$3,000
of
prior
year
taxes
during
the
first
two
months
of
the
current
fiscal
year
and
another
$2,000
during
the
remainder
of
the
current
fiscal
year.
What
amount
of
property
tax
revenues
should
the
city
report
in
the
government-wide
financial
statements
for
the
current
fiscal
year?
A
credit
to
Appropriations.
-
ANS-When
the
budget
for
the
General
Fund
is
recorded,
the
required
journal
entry
will
include:
A
Credit
to
Other
Financing
Sources
for
5,000
-
ANS-Equipment
that
had
been
acquired
several
years
ago
by
a
special
revenue
fund
at
a
cost
of
$40,000
was
sold
for
$15,000
cash.
Accumulated
depreciation
of
$30,000
existed
at
the
time
of
the
sale.
The
journal
entry
to
be
made
in
the
governmental
activities
journal
will
include
all
of
the
following
except:
A
credit
to
Other
Financing
Uses-Capital
Leases.
-
ANS-At
the
inception
of
a
capital
lease
for
equipment
the
journal
entry
required
in
the
capital
projects
fund
will
include
which
of
the
following?
A
debit
to
cash
for
$15,000
-
ANS-Equipment
that
had
been
acquired
several
years
ago
by
a
special
revenue
fund
at
a
cost
of
$40,000
was
sold
for
$15,000
cash.
Accumulated
depreciation
of
$30,000
existed
at
the
time
of
the
sale.
The
journal
entry
to
be
made
in
the
special
revenue
fund
will
include:
A
debit
to
Estimated
Revenues.
-
ANS-The
journal
entry
to
record
budgeted
revenues
will
include:
Accrual
Basis-
NO
Modified
Accrual-
YES
-
ANS-Under
which
basis
of
accounting
for
a
government
should
revenues
be
recognized
in
the
period
when
they
are
measurable
and
available?
All
of
the
above
are
correct.
-
ANS-Goods
for
which
a
purchase
order
had
been
placed
at
an
estimated
cost
of
$1,600
were
received
at
an
actual
cost
of
$1,550.
The
journal
entry
in
the
General
Fund
to
record
the
receipt
of
the
goods
will
include
a:
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