Chapter 5 Solution Manual

Chapter 5 Solution Manual - C HAPTER 5 Accounting for Other...

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Unformatted text preview: C HAPTER 5 Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent 5-1. T HE SOLUTION TO THIS AND THE FIRST EXERCISE OF C HAPTERS 1 THROUGH 8 WILL DIFFER FROM STUDENT TO STUDENT , ASSUMING EACH HAS A DIFFERENT CAFR. 5.2. I N DETERMINING THE APPROPRIATE FUND TO RECORD THE TRUST , IT IS IMPORTANT TO DETERMINE : (1) WHETHER THE TRUST BENEFITS THE GOVERNMENT OR ITS CITIZENRY OR (2) ALTERNATIVELY WHETHER THE TRUST BENEFITS INDIVIDUALS , PRIVATE ORGANIZATIONS OR OTHER GOVERNMENTS . IF THE TRUST BENEFITS INDIVIDUALS , PRIVATE ORGANIZATIONS OR OTHER GOVERNMENTS , IT SHOULD BE REPORTED IN THE PRIVATE- PURPOSE TRUST FUND , A FIDUCIARY TYPE FUND . I F THE TRUST BENEFITS THE GOVERNMENT OR ITS CITIZENRY , IT IS IMPORTANT TO DETERMINE WHETHER THE TRUST PRINCIPAL MUST BE MAINTAINED OR ALTERNATIVELY , IF IT CAN BE EXPENDED FOR PURPOSES SUPPORTED BY THE TRUST . I F THE TRUST PRINCIPAL MUST BE MAINTAINED , THE TRUST SHOULD BE REPORTED IN A PERMANENT FUND . I F THERE IS NO REQUIREMENT TO MAINTAIN THE PRINCIPAL , IT SHOULD BE REPORTED IN A SPECIAL REVENUE FUND . 5-3. A T THE INCEPTION OF THE LEASE , THE PRESENT VALUE OF THE MINIMUM LEASE PAYMENTS SHOULD BE REPORTED AS A CAPITAL EXPENDITURE AND AN OTHER FINANCING SOURCE WITHIN AN APPROPRIATE GOVERNMENTAL TYPE FUND ( TYPICALLY THE G ENERAL F UND OR A CAPITAL PROJECTS FUND ). R ENTAL PAYMENTS WOULD TYPICALLY BE REPORTED AS INTEREST AND PRINCIPAL EXPENDITURES IN THE G ENERAL F UND OR A DEBT SERVICE FUND . A T FISCAL YEAR END , THE LEASED ASSET SHOULD BE REFLECTED IN THE G OVERNMENT- WIDE S TATEMENT OF N ET A SSETS AS A CAPITAL ASSET AT NET BOOK VALUE ( I . E . THE PRESENT VALUE OF THE MINIMUM LEASE PAYMENTS AT THE INCEPTION OF THE LEASE LESS ACCUMULATED DEPRECIATION ). S IMILARLY , THE UNPIAD BALANCE OF THE LEASE OBLIGATION SHOULD BE REPORTED IN THE G OVERNMENT- WIDE S TATEMENT OF N ET A SSETS AS A LIABILITY . 5-4 PART A. SPENCER COUNTY COURTHOUSE ANNEX CAPITAL PROJECTS FUND GENERAL JOURNAL CLOSING ENTRY D EBITS C REDITS O THER F INANCING S OURCES-P ROCEEDS OF B ONDS O THER F INANCING S OURCES-P REMIUM ON B ONDS I NTERGOVERNMENTAL REVENUE C APITAL E XPENDITURES E NCUMBRANCES O THER F INANCING U SES-T RANSFERS O UT F UND BALANCE 2,000,000 35,000 400,000 1,485,000 750,000 35,000 165,000 5-4 PART B. SPENCER COUNTY COURTHOUSE ANNEX CAPITAL PROJECTS FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE YEAR ENDED JUNE 30, 2012 R EVENUES : I NTERGOVERNMENTAL G RANT $ 400,000 E XPENDITURES : C APITAL O UTLAY 1,485,000 E XCESS (D EFICIENCY ) OF R EVENUES O VER E XPENDITURES O THER F INANCING S OURCES (U SES ) P ROCEEDS OF B ONDS B OND P REMIUM T RANSFERS O UT (1,085,000) 2,000,000 35,000 (35,000) T OTAL O THER F INANCING S OURCES (U SES ) 2,000,000 N ET C HANGE IN F UND B ALANCE 915,000 F UND B ALANCE , J AN . 1, 2012--0-- F UND B ALANCE , D EC . 31, 2012 $ 915,000 5-4 PART C....
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Chapter 5 Solution Manual - C HAPTER 5 Accounting for Other...

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