Assume that Nolanvilles scal year ends on December 31.

1. Nolanvilles payroll for one of its departments is $15,000 per week. It pays its employees on the Thursday of the week following that in which the wages and salaries are earned. In 2018, December 31 falls on a Thursday. For the workweek beginning Monday, December 28, 2018, and ending Friday, January 1, 2019, employees were paid on Thursday, January 7, 2019. For scal 2018, what amount should the city recognize as wage and salary expenditure/expense pertaining to the week ending Friday, January 1, 2019, in its fund statements and its governmentwide statements?

Fund Statements

a.$ 0 b. $9,000 c. $ 0 d. $9,000

Government-wide Statements

$ 0 $9,000 $9,000 $ 0

2. In its fund nancial statements, the city would recognize the receipt of a new computer (to be used for general administrative purposes) that it had ordered the previous year as an

a. Encumbrance

b. Expense

c. Expenditure d. Asset

3. In 2018, city employees earned $1.4 million in sick leave that they did not take during the year. The city estimates that of this amount, $0.8 million will actually be paid to employees who take sick leave. Of the balance, $0.1 million will be paid to employees upon their retirement or resignation and $0.5 million will not have to be paid (since employees are limited in the number of sick days that they

Recognizing Expenditures in Governmental Funds

can carry over from one year to the next). The amount that the city should add to a fundstatement liability account as of yearend 2018 is

a. $0

b. $0.1 million

c. $0.8 million d. $0.9 million

4. Assume the same facts as in the previous question. The amount that the city should add to the liability account in the governmentwide statement of net position as of yearend 2018 is

a. $0

b. $0.1 million

c. $0.8 million d. $0.9 million

5. In 2018 city employees earned $3.6 million in vacation pay that they did not use during the year. The city estimates that of this amount $2.8 million will be paid in 2019 (out of amounts budgeted for that year), $0.6 million will be paid in subsequent years, and the balance of $0.2 million will not have to be paid. The amount that the city should add to a fundstatement liability account as of yearend 2018 is

a. $0

b. $2.8 million c. $3.4 million d. $3.6 million

6. Assume the same facts as in the previous question. The amount that the city should add to the liability account in the governmentwide statement of net position as of yearend 2018 is

a. $0

b. $2.8 million

c. $3.4 million d. $3.6 million

7. Nolanville starts scal 2018 with $25,000 in supplies. During the year it orders $180,000 in supplies, receives $170,000, and uses $190,000. It accounts for inventories on the purchases basis. In its 2018 governmental fund nancial statements it should report

Expenditure

a. $180,000 b. $170,000 c. $190,000 d. $190,000

Nonspendable Fund Balance

$ 0 $ 5,000 $ 0 $15,000

8. Assume the same facts as in the previous question. In its 2018 governmentwide nancial statements it should report

Expense

a. $170,000 b. $170,000 c. $190,000 d. $190,000

Inventory

$ 0 $15,000 $ 5,000 $15,000

9. On December 1, 2018, Nolanville issued $10 million of 30year, 8 percent bonds for $9.78 million, a price that re ects a semiannual yield of 4.1 percent. Interest ($400,000 per semiannual period) is payable on May 31 and November 30, beginning May 31, 2019. In its 2018 fund and governmentwide statements, Nolanville should report an interest expenditure/expense of

a.$ 0 b. $66,667 c. $66,830 d. $ 0

Government-wide Statements

$ 0 $ 66,667 $ 66,830 $66,830

10. In May 2020, Nolanville repaid $2 million of the bonds that it had issued in 2018. In its 2020 fund and governmentwide statements, Nolanville should report an expenditure/expense relating to the repay- ment of the bonds of

Fund Statements Government-wide Statements a.$0 $0

b. $2million c. $0

d. $2 million

$ 0 $2million $2 million