Homework #2

1. Gold County received goods that had been approved for purchase but for which payment had not yet been made. Should the accounts listed below be increased? 

2. Rock Couny has acquired equipment through a lease contract that transfers ownership that is dated December 31, Year 0. This agreeement requires no down payment and the following minimum lease payments.

If the lease payments are required to be made from a debt service fund, what account or accounts should be debited in the debt service fund for the December 31, Year 1 lease payment of $65,000

3. The following transactions were among those reported to Corfe City’s electric utility enterprise fund for Year 1

In the electric utility enterprise fund’s statement of cash flows for the year ended December 31, Year 1, what amound should be reported as cash flows from capital and related financing activites

4.  Zarr Town levied property taxes of $500,000 of which 1 percent is expected to be uncollectible.  During the year, Zarr Town collected $450,000.  What amount of property tax revenue should Zarr Town  report in its government-wide statement of activities for the current year

5.   The budget of the City of Goodville for the year ending December 31 was adopted and recorded on January 2 of the same year.  After recording the budget, the accounting records showed a debit balance of $50,000 in the Budgetary Control account.  What does this indicate?

6. On September 30, Year 1, a local township entered into an interest rate swap to hedge the risk associated with fair value changes to its recently issued bonds.  The fair value of the interest swap was $0 and $18,000 at September 30, Year 1, and December 31, Year 1, respectively.  Assuming that the fair value hedge is 100 percen effective and wll be fully executed on March 31, Year 2, how would the change in fair value of the hedge be reported by the township at December 31 Year 1 end?

7. General fund resource that are limited as to use by constraints imposed by law through constitutional or enabling legislation would be classified within fund balance as:

8.   A city received a $9,000,000 federal grant to finance the constitution ofa homeless shelter.  In which fund should the proceeds be recorded?

9.  Ridge Township’s governing body adopted its general fund budget for the year ended July 31, year 1, composed of estimated revenues of $100,000 and appropriations of $80,000.  Ridge formally integrates its budget into the accounting records.  To record the $20,000 budget excess of estimated revenues over appropriations, Ridge should:

10.  Pine City’s year end is June 30.  Pine levies property taxes in January of each year for the calendar year.  One half of the levy is due in May and one half is due in October.  Property tax revenue is budged for the period in which payment is due.  The following information pertains to Pine’s property taxes for the period from July 1, Year 1,  to June 30, Year 2

The $40,000 balance due for the May, Year 2 installments was expected to be collected in August, Year 2.  What amount should Pine recognize for property tax revenue for the year ended July 30, Year 2?

11.  John City entered into a lease agreement representing a contract that transfers ownership for equipment during the year.  How should the asset obtained through the lease be reported in John City’s government-wide statement of net position?

12.