Question
Converting from Modified Accrual to Accrual Accounting The Village of Rodale keeps its governmental fund accounting records on a modified accrual basis. At the end
Converting from Modified Accrual to Accrual Accounting
The Village of Rodale keeps its governmental fund accounting records on a modified accrual basis. At the end of the fiscal year the village accountant must covert the modified accrual information to accrual information to allow for preparation of the government-wide financial statements. Following are several transactions identified by the accountant that will require conversion. The village has a fiscal year end of December 31.
During the year the village continued to pay interest on a loan that was entered into two years ago. The interest is due on April 1 in the amount of $5,000. On December 15 the village took out a long-term note payable in the amount of $30,000. During the year the village purchased a vehicle at a cost of $28,500. During the year the village sold equipment for $1,500. The equipment had originally been purchased for $18,750 and had accumulated depreciation of $17,000. At the end of the year the village determined that $1,000 of property taxes receivable would not be available for use within 60 days of the fiscal year end. At the end of the year depreciation expense of $587,500 was recorded on buildings and equipment. At the end of the year salaries amounting to $36,400 were accrued as was interest related to the loan in transaction 1.
Required
Prepare modified accrual to accrual adjustments for all of the transactions identified in items 1-7.
Your answer sheet should be organized as follows. In the first column prepare the journal entry under modified accrual, in the third column prepare the journal entry at the government-wide level (accrual) in the middle (second) column record the transaction that would be needed to adjust information from modified accrual to accrual. Keep in mind that in some cases, the conversion affects only accrual accounts since the conversion entries relate to accounts that were originally only recorded at the government-wide level. THIS IS NOT A GROUP PROJECT WORK ALONE or you grade will be negatively affected.
Conversion from Government-wide
Modified Accrual Entry____ Modified to Accrual Entry Accrual Entry
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started