Scenario 1: Jonesboro City suffered severe structural damage after a hurricane hit August 10, 20x7. Hurricanes are common in the area, but it had been a half of a century since the last hurricane hit. The building was purchased in 11 years earlier for $2 million and had accumulated depreciation of $600,000 as of June 20X7. An impairment loss of $190,000 was prepared during a cost analysis with the engineers. The city expects to receive recoveries from insurance claims of $90,000 for damages to the building. Response: Explain the criteria that the loss would need to meet to be reported as an extraordinary item or a special item? What are the GASB requirements for reporting the insurance recovery in the following fiscal year? Prepare the journal entry for the impairment loss for governmental activities at the government-wide level. What are GASB requirements for tax funds? (100 points) Scenario 2: Property taxes collected by funds and governments within county boundaries are used to refund Jonesboro County for expenses related to operating the tax agency fund. Each town and the school districts have a 1.5% deduction by the agency fund. The total deduction for the county is transferred to the Jonesboro County General Fund after collections are made. During 20X7, the following county tax amounts were collected: County General Fund, $10,333,000; Jonesboro City General Fund, $4,840,000; Jonesboro County Consolidated School District, $6,550,000; Other towns, $3,120,000. The total amount collected from the different sources was $24,843,000. During the first half of 20X7, $13,700,000 was collected for current taxes and fund and government liabilities were recorded. Prepare a schedule of collections for each participant showing the county General Fund amounts withheld and net due to participants. Tax agency fund cash was assigned. Required: Prepare journal entries for each of the above transactions that altered the tax agency fund. Assuming 4% of the gross tax levy will be uncollectible, prepare the journal entries that pertain to the Jonesboro County General Fund. Assuming 2% of the gross levy for Jonesboro City will be uncollectible, prepare the journal entries to record the transactions that affect the Jonesboro City General Fund. What financial statements are required to be prepared by the tax agency fund? Compare the financial statement requirements from the United States with at least two other countries. Would the same financial statements be used and why? What are GAAP requirements for preparing financial statements? (100 points) Scenario 3: Decatur Health Clinic had the following statement of financial position for fiscal year 20X7. Is the statement presented in compliance with the FASB standards? If it is not presented in compliance with the FASB standards, prepare a list of corrections or modifications to correct the statement. Download the Decatur Health Clinic Statement of Financial Position at the bottom of the page. Response: It levied and collected $1 million in taxes dedicated to the repayment of outstanding general obligation bonds. It billed sponsors of a charity bicycle ride $5,000 for providing police patrols during the ride. It recognized $60,000 of cash dividends on investments dedicated to the support of a county arts center. It recognized $70,000 of cash dividends on investments dedicated to scholarships for needy county residents. It incurred $6 million in construction costs to complete a new county jail. The new jail was funded entirely with the proceeds of long-term bonds. It transferred $400,000 of unrestricted funds to an appropriate fund to be invested and eventually used to repay the principal on the long-term jail bonds (entries in two funds required). It recognized depreciation of $100,000 on equipment in a vehicle repair center that services all county departments that have motor vehicles. It collected $30,000 in parking fees at the county owned garage. It issued $8 million in bonds to improve the city-owned electric utility. It distributed $3 million in taxes collected on behalf of school districts located within the country.