Question
6.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.
6.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 Webster on January 1, 2020, for six years. Based on a negotiated annual implicit interest rate of 5 percent, the parties agree on annual payments of $112,581 beginning immediately and each January 1 thereafter. For both governments, the trucks relate to activities maintained with the General Fund.
A What is the total amount of expenditures that Webster report on its fund financial statements for the governmental funds for 2020?
a. 112581
b. 136954
c. 600000
d. 712581
B.What amount of depreciation expense will Reynolds report on government-wide financial statements for 2020?
a. 0
b. 52581
c. 100000
d. 112581
C. What amount of deferred lease revenue will Reynolds report on its statement of net position as of December31,2020, assuming that country recognizes revenue on a straight-line method?
a. 0
b. 487419
c. 500000
d. 511790
7. A city creates a solid waste landfill. It assesses a charge to every individual or company that uses the landfill based on the amount of materials added. In which of the following will the landfill probably be recorded?
a. General fund
b. Special revenues funds
c. Internal service funds
d. Enterprise fund
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