EX 4-4, EX 4-8, P 4-2 Grants are not necessarily recognized as revenue when they are awarded.Columbus City was awarded a state reimbursement grant of $150,000 to assist its adult literacy program. The following were significant events relating to the grant:

The city, which is on a calendar year, was notified of the award in November 2017.

During 2018 it expended $30,000 on the literacy program and was reimbursed for $20,000. It expected to receive the balance in January 2019. In 2019 it expended the remaining $120,000 and was reimbursed by the state for the $10,000 owing from 2018 and the amount spent in 2019.

1. Prepare journal entries to record the events in a governmental fund.

2. Suppose instead that the city received the entire $150,000 in cash at the time the award was announced in 2017. How much revenue should the city recognize in its governmental fund statements in each of the three years? Explain.

3. Suppose alternatively that the state awarded the city an unrestricted grant of $150,000, which the city elected to use to support the adult literacy program. The city received the entire $150,000 in cash at the time the award was announced in 2017. How much revenue should the city recognize in its govern- mental fund statements in each of the three years? Explain.