Question
1.Assume that the general fund of the city of Troy gives $200,000 to the Citys debt service fund, to let the debt service fund pay
1.Assume that the general fund of the city of Troy gives $200,000 to the Citys debt service fund, to let the debt service fund pay for a principal payment on a long-term bond. There is no expectation that the money will ever be paid back to the general fund. The journal entry for the general fund would include a credit to cash, and a debit to
| a | Receivable from debt service fund | |
| b | Principal payment expense | |
| c | Principal payment expenditure | |
| d | Other uses of funds transfer to debt service fund |
2.
Which of the following outflows would be recorded the same way under both modified accrual and full accrual? (By the same, I mean that one would record the same amount as an expenditure that the other records as an expense.)
| a | Payment of $1 million for a new building | |
| b | Payment one week after the end of the fiscal year for salaries earned during that year. | |
| c | Depreciation on a building | |
| d | Payment of $1 million to pay principal on an outstanding long-term loan |
4.This uses the same facts as the prior problem. The city of Troy has a July 1 to June 30 fiscal year. It assesses property taxes on this same fiscal year basis. Assume that on June 1, 2020, it mails out property tax bills that apply to the fiscal year ending June 30, 2021. It collects the following: 100,000 in June, 2020; $3,000,000 between July 1, 2020, and June 30th, 2021; $200,000 in July 2021, $80,000 in August, 2021; $70,000 in September 2021, and expects to eventually collect another $50,000. Under full accrual, what are the property tax revenues for the fiscal year ended June 30, 2021?
| $3,000,000 | ||
| $3,100,000 | ||
| $3,380,000 | ||
| $3,450,000 | ||
| $3,500,000 |
3.The city of Troy has a July 1 to June 30 fiscal year. It assesses property taxes on this same fiscal year basis. Assume that on June 1, 2020, it mails out property tax bills that apply to the fiscal year ending June 30, 2021. It collects the following: 100,000 in June, 2020; $3,000,000 between July 1, 2020, and June 30th, 2021; $200,000 in July 2021, $80,000 in August, 2021; $70,000 in September 2021, and expects to eventually collect another $50,000. Under modified accrual, what are the property tax revenues for the fiscal year ended June 30, 2021?
| a | $3,000,000 | |
| b | $3,100,000 | |
| c | $3,380,000 | |
| d | $3,450,000 | |
| e | $3,500,000 |
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Management Accounting
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu
6th Canadian edition
013257084X, 1846589207, 978-0132570848
