strayer.acc410.wk2.2011.sln[1]

strayer.acc410.wk2.2011.sln[1] - ACCT 410 Week 2 Homework...

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ACCT 410 – Week 2 Homework Solution This assignment was worth 45 points out of the total for the course, 1,656. Point values are indicated in parentheses after each problem listed below. Pr. 2-3 – Journal entries, reports and comments (4 points) Part 1. Journal entries (prepare for transactions a through e) - .40 per journal entry * 5 = 2 points 1. Journal entries in general fund (in millions) (a) Cash $20.0 Proceeds from borrowing $20.0 To record the issuance of bonds (b) Expenditure for land $ 4.0 Cash $ 4.0 To record the purchase of land (c) Cash $ 1.0 Proceeds from sale of land $ 1.0 To record sale of land (d) Expenditure for repayment of bonds $ 2.0 Cash $ 2.0 To record repayment of bonds (e) Expenditure for legal claims $ 3.0 Cash $ 3.0 To record payment of judgment Pr. 2-3 - Part 2. Balance Sheet. Keep in mind that a Balance Sheet for the General Fund does not include capital assets or long-term liabilities – .50 point Balance Sheet – Special District Fund Assets: Cash $12,000,000 Total Assets $12,000,000 Liabilities and Fund Balance: Fund Balances (net Assets) $12,000,000 1
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Pr. 2-3 - Part 2. Statement of Revenues, Expenditures and other changes in Fund Balances. Following the format of Table 2-2, page 26, all of the increases and decreases fall into the “Other increases and decreases in Fund Balances” category – .50 point Statement of Revenues, Expenditures and other changes in Fund Balances Revenues and Other Financing Sources: Bond proceeds $20,000,000 Proceeds from sale of land 1,000,000 Total revenues and other financing sources $21,000,000 Expenditures and other financing uses: Repayment of bonds $2,000,000 Acquisition of land 4,000,000 Legal claims 3,000,000 Total Expenditures and other financing sources $9,000,000 Excess of revenues and other financing sources over expenditures and other financing sources $12,000,000 Pr. 2-3 - Part 3. Comments on the balance sheet (see the problem.). – .50 point The balance sheet fails to capture key long-term (capital) assets and long-term obligations. That is because it is intended to indicate only the current financial resources available to meet current obligations. Pr. 2-3 - Part 4. Comment on the Statement of Revenues, Expenditures and other changes in Fund Balances (see the problem.) – .50 point The statement of revenues, expenditures and other changes in fund balances does not measure the cost of services (e.g., it recognizes borrowings as an increase in fund balance and the full cost of acquiring capital assets as a decrease). It is not designed to show cost of services. Instead it is designed to report on flows of current financial resources — net assets that are likely of great interest to the district’s governing body, managers and constituents. **************** Pr. 2-4 – Journal entries, Financial Reports. (2 points)
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This note was uploaded on 08/17/2011 for the course ACCT 410 taught by Professor Khalib during the Spring '11 term at Strayer.

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strayer.acc410.wk2.2011.sln[1] - ACCT 410 Week 2 Homework...

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