ACCT 567 Final Exam Answers


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ACCT 567 Final Exam Answers

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ACCT 567 Final Exam Answers

 

1. (TCO A) On what should the government-wide financial statements report?

 

2. (TCO B) According to GASB standards, when should transfers be recognized?

 

3. (TCO C) Comparisons of budgeted versus actual revenues and expenditures are a requirement of which of the following situations?

 

4. (TCO D) The revenues account of a government entity is debited when?

 

5. (TCO E) During the year, a wealthy local businessman donated a building to city of Perris. The original cost of the building was $340,000. Accumulated depreciation at the date of the gift amounted to $220,000. The appraised fair market value of the donation at the date of the gift was $525,000 of which $35,000 was the value of the land on which the building was situated. At what amount should the city record this donated property in the governmental activities accounts at the government-wide level?

 

6. (TCO E) Which of the following resource inflows would be recorded as a revenue of a debt service fund?

 

7. (TCO G) Which of the statements concerning agency funds is a true statement?

 

8. (TCO J) Which of the following items are typically reported differently between the governmental fund statements and the governmental activities column of the government-wide statements?

 

9. (TCO H) A condition whereby the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis is called a(an)

 

10. (TCO H) Under FASB Standards, how would a not-for-profit organization recognize a conditional pledge?

 

11. (TCO I) Which of the following items would not affect the amounts reported in the Revenues and Gains section of the statement of activities for aprivate college or university?

 

12. (TCO I) The primary source of revenues for most hospitals are:

 

1. (TCOs D, E, F, and G) Please list the name of the fund(s) in which each of the following transactions or events would be recorded.
(1) Bonds of $1,000,000 from which the proceeds are to be used for the construction of a new City Hall building.
(2) Salaries of $170,000 were paid to personnel in the office of the mayor.
(3) Installment payments of $75,000 were received from the property owners that were assessed for the street improvement project.
(4) Over $65,000 of funds were received by employees by payroll deductions that are to be used for the purchase of United States Government Bonds for those employees on an individual basis.
(5) Materials of $140,000 were to be used for the general repair of the streets that were purchased by the city.
(6) Excess funds of $60,000 were transferred from the water utility to the General Fund.
2. (TCO F) The garbage collection of the city of Rockwell could be accounted for through the General Fund, a Special Revenue Fund, or an Enterprise Fund. Please identify the circumstances in which each of these fund types might be appropriate.
3. (TCO I) During the fiscal year of June 2012, Jefferson General Hospital, a not-for-profit healthcare organization, had the following revenue-related transactions. (The amounts are summarized for the entire year.)
(1) Healthcare services that are provided to inpatients and outpatients amounted to $9,640,000, of which $420,000 were for charity cases, $865,000 was paid by uninsured patients, and $8,355,000 was billed to Medicare, Medicaid, and other insurance companies.
(2) Pharmaceutical drugs and medicines sold by the hospital pharmacy amounted to $830,000, all of which was paid by the customer or the insurance companies.
(3) Medicare, Medicaid, and third-party payors (insurance companies) approved and paid $5,640,000 of the $8,355,000 billed by the hospital during the year (please review transaction #1).
(4) A contribution of $4,000,000 (of which is unconditional) was received in cash from a donor to construct a new facility for cancer patients. The full amount is expendable for that purpose. No activity has taken place during the current year.
(5) A total of $810,000 was received from the following activities/sources: cafeteria and gift shop sales, $630,000, unrestricted transfers from the Claremont Hospital Foundation, $110,000, and fees for medical transcripts, $70,000.
(6) The allowance for uncollectible receivables was increased by $1,350.
Enter the templates provided in the answer space and complete the following requirements:
Requirements:
a. Record the preceding transactions in general journal form.
b. Prepare the unrestricted revenues, gains, and other support section of Jefferson General Hospital’s statement of operations for the current year.
Templates:
Part A
……………………………………………………………………………..Debit…………………….. Credit
a. Cash
Accounts and Notes Receivable
Patient Service Revenue
b. Cash
Other revenues
c. Cash
Contractual adjustments
Accounts and Notes Receivable
d. Cash
Contributions-Temporarily Restricted
e. Cash
Other revenues
f. Provision for Bad Debts
Allowance for Uncollectible Receivables
Part B
Unrestricted Revenues, Gains, and Other Support:
Net Patient Service Revenue $ xxx
……………………..Other revenues xxx
4. (TCO E) Enter the template provided in the answer space and record the following transactions in the Capital Projects Fund in the general journal for the following transactions.
a. McDowell County issued $4,000,000, 5% bonds with interest payable on a semiannual basis on July 1 and January 1. The bonds sold for 102 on July 30, 2012. Proceeds from the bond issue were to be used for construction of the new sheriff station with all interest and premiums received to be used to service the debt issue.
b. A state grant of $250,000 was received to help finance the construction of the sheriff station.
c. The General Fund transferred $300,000 for use in the construction of the new sheriff station.
d. A federal grant of $500,000 was received to help finance the construction of the new sheriff station.
e. A construction contract was awarded to the Young Construction Company in the amount of $4,750,000.
f. The new sheriff station was completed on May 1, 2013, three months ahead of schedule. The construction expenditures amounted to $4,870,000. When the project was completed, the cost of the sheriff station was allocated to the following, $310,000 for land, $4,180,000 for the building, and the remainder to equipment.
g. The temporary accounts of the capital projects were closed to Fund Balance-Restricted. The amounts are restricted due to the bond issue that is related to the construction of the sheriff station. The capital projects fund will be closed by transferring remaining funds to the debt service fund for repayment.
Template:
Capital Project Fund (only) ……………………………………….debit………………………. credit
a. Cash
Other Financing Sources-Bond Proceeds
b. Cash
Revenues
c. Cash
Other Financing Sources-Transfer In
d. Cash
Revenues
e. Encumbrances
Reserve for Encumbrances
f. Construction Expenditures
Cash
Reserve for Encumbrances
Encumbrances
g. To close the temporary accounts:
Other Financing Sources-Bond Proceeds
Other Financing Sources-Transfers In
Revenues
Construction Expenditures
Fund Balance-Restricted
To close the Capital Projects Fund:
Other Financing Uses-Transfers Out
Cash
Fund Balance-Restricted
Other Financing Uses-Transfers Out

 

 

5. (TCO F) The following Statement of Cash Receipts and Disbursements was prepared by the bookkeeper of the City of Glass City Museum of Science. The museum is a component unit of the City of Glass City and must be included in the city’s financial statements. It began operations on January 1, 2012 with no liabilities or commitments and only two assets.
(1) $6,000 in cash and (2) Land that was acquired for $11,000.
Cash Basis
12 months
Cash Receipts:
Admission Fees $295,000
Loan from the Bank $50,000
Total deposits $345,000
Cash Disbursements:
Supplies $62,000
Wages 104,000
Utilities 48,000
Purchase of Equipment 70,000
Purchase of Fixtures 45,000
Interest on the Bank Loan 1,250
Total checks $330,250
Excess of Receipts Over Disbursements $14,750
Additional Information:
• The loan from the bank is dated April 1 and is for a five-year period. Interest (5% annual rate) is paid on Oct. 1 and April 1 of each year, beginning Oct. 1, 2012.
• The equipment was purchased on April 1, 2012 with the proceeds provided by the bank loan and has an estimated useful life of 10 years (please use the straight-line method of depreciation) for computing depreciation on the equipment. The fixtures were purchased on July 1, 2012 and has an estimated useful life of five years (please use the straight-line method of depreciation) for computing depreciation on the fixtures.
• Supplies on-hand amounted to $5,900 at December 31, 2012.
• All other bills and salaries related to 2012 had been paid by the close of business on December 31.
Required:
Enter the template provided in the answer space and complete the following requirements:
Please prepare a Statement of Revenues, Expenses, and Changes in Net Assets for the year ended December 31, 2012 assuming the city plans to account for its activities on the accrual basis.
Template:
Operating Revenues:
Charges for Services $
Operating Expenses:
Wages $
Supplies ($62,000-5,900)
Utilities
Depreciation ($70,000/10*9/12)
+ ($45,000/5*6/12)
Total Operating Expenses
Operating Income (Loss) $
Non operating Expenses:
Interest $1,250 + ($50,000*5%*3/12)
Change in Net Assets
Net Assets, Jan. 1, 2012
Net Assets, Dec. 31, 2012

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