Chap 2 hw - Government & NOT-FOR-PROFIT Accounting, Michael H. Granof & Saleha B. Khumawala C&P 8th Ed.

1 - The following relates to the town of Coupland (dollar amounts in thousands):

Equipment used in a vehicle repair service that provides service to other departments on a cost-reimbursement basis; the equipment has a 10-year life with no salvage value $1,400

Property taxes levied and collected $6,300

Hotel taxes (restricted to promotion of tourism) collected $1,200

Proceeds of bonds to build a parking garage that must be repaid from user charges $4,000

Proceeds of general obligation bonds to finance construction of a new city hall; the building, which was completed during the year, has a useful life of 30 years with no salvage value $9,000

Proceeds of a federal grant to hire additional police officers $1,000

Fees charged to, and collected from, customers by the electric utility $8,000

Refer to the two lists below. Select the appropriate amounts from the lettered list for each item in the numbered list. An amount may be selected once, more than once, or not at all.

1. Revenue to be recognized in an enterprise fund

2. Revenue to be recognized in special revenue funds

3. Bonds payable to be recognized in the general fund

4. Bonds payable to be recognized in enterprise funds

5. Depreciation expenditure to be recognized in the general fund

6. Depreciation expense to be recognized in internal service funds

7. Revenue to be recognized in an internal service fund

8. Revenue to be recognized in the general fund

9. Long-lived assets to be recognized in the general fund

10. Long-lived assets to be recognized in internal service funds

a. $0

b. $140

c. $900

d. $1,260

e. $1,040

f. $1,400

g. $2,200

h. $4,000

i. $6,300

j. $8,000

k. $8,500

l. $10,400

2 - Measurement focus is closely tied to basis of accounting.

A newly established not-for-profit organization engaged in the following transactions.

1. A donor pledged $1,000,000, giving the organization a legally enforceable 90-day note for the full amount.

2. The donor paid $300,000 of the amount pledged.

3. The organization purchased a building for $600,000, paying $120,000 and giving a 30-year mortgage note for the balance. The building has a 30-year useful life. When appropriate, the organization charges a full-year's depreciation in the period of acquisition.

4. It hired employees. By the end of the period, they had earned $4,000 in wages but had not yet been paid. The organization accounts for its activities in a single fund.

a. Prepare journal entries to record the transactions, making the following alternative assumptions as

to the organization's measurement focus:

Cash only

Cash plus other current financial resources (i.e., cash plus short-term receivables less short-term payables)

All economic resources