Accounting for Governmental & Nonprofit Entities 17th edition by reck - Test Bank Instant Download - Complete Test Bank With Answers Sample Questions Are Posted Below Chapter 05 Accounting for General Capital Assets and Capital Projects True / False Questions 1. General capital assets should be distinguished from capital assets …
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Accounting for Governmental & Nonprofit Entities 17th edition by reck – Test Bank
Instant Download – Complete Test Bank With Answers
Sample Questions Are Posted Below
Chapter 05
Accounting for General Capital Assets and Capital Projects
True / False Questions
| 1. | General capital assets should be distinguished from capital assets that are specifically associated with activities financed by proprietary and fiduciary funds, since capital assets acquired by proprietary and fiduciary funds are accounted for by those funds.
True False |
| 2. | GASB standards require that all governmental expenditures for long-lived assets be accounted for by a capital projects fund.
True False |
| 3. | General capital assets purchased or constructed with governmental fund resources are recorded in the governmental activities general ledger at the government-wide level.
True False |
| 4. | The disposal of a general capital asset, resulting in no revenue or expenditure to the government, is recorded only in the governmental activities accounts.
True False |
| 5. | Historical cost includes acquisition cost less any ancillary costs necessary to put the asset into use.
True False |
| 6. | Depreciation of general capital assets for the period should be reported in the statement of activities at the government-wide level.
True False |
| 7. | GASB allows governments with a population below 100,000 to choose the modified approach, whereby they are not required to record depreciation on general capital assets.
True False |
| 8. | Acquisition of a general capital asset represents an expenditure in a governmental fund, but requires capitalization of an asset at the government-wide level.
True False |
| 9. | While the GASB encourages capitalization of all collections or individual works of art or historical treasures, governments can opt not to capitalize if certain conditions exist.
True False |
| 10. | General capital assets acquired under capital leases should not be recorded in the governmental activities accounts.
True False |
| 11. | One of the required general capital asset disclosures is a schedule of the additions to, and deductions from, general capital assets during the course of a fiscal year.
True False |
| 12. | General capital assets acquired with capital projects fund resources would be recorded in essentially the same manner as if they had been acquired by the General Fund.
True False |
| 13. | Capital projects funds should use the modified accrual basis of accounting for revenues and expenses.
True False |
| 14. | Capital projects funds generally do not use the Encumbrances control account.
True False |
| 15. | In the capital projects fund general journal, Construction Work in Progress is the account used to capitalize the accumulated cost of partially-completed general capital assets.
True False |
| 16. | Intangible assets are defined by the GASB as capital assets that lack physical substance, have a useful life of more than one reporting period, and are nonfinancial in nature.
True False |
| 17. | Proceeds of debt issued for the construction or acquisition of capital assets are recognized by the capital projects fund as “other financing sources” and as a liability in the governmental activities journal.
True False |
| 18. | It is common practice for a portion of contractor payments to be withheld in the capital projects fund until final inspection and acceptance of the asset under construction has occurred.
True False |
| 19. | The recorded premium on tax-supported bonds issued by a capital projects fund should be amortized at both the government-wide and fund levels.
True False |
| 20. | Interest incurred during construction of general capital assets cannot be capitalized as part of the cost of those assets.
True False |
| 21. | State laws often require that assets no longer needed in a capital projects fund be transferred to the fund that will service the debt incurred for the project, a debt service fund.
True False |
| 22. | Streets, curbs, and sidewalks constructed or acquired through use of capital projects fund resources should never be reported in the financial statements of a government because they are for the use of the public, not for use by the government.
True False |
| 23. | When a government experiences delays associated with a bond issuance, it is common practice to obtain temporary financing by use of bond anticipation notes.
True False |
| 24. | The acquisition of long-lived assets under an operating lease does not require any asset recognition in the accounts of any governmental fund.
True False |
| 25. | Water rights purchased by a city would be considered an intangible asset.
True False |
| 26. | Capital projects funds differ from the General Fund and special revenue funds in that the latter categories have a year-to-year life, whereas capital projects funds have a project-life focus.
True False |
| 27. | If general capital assets are donated, revenue related to the donation is recognized in the governmental fund statement of revenue, expenditures and changes in fund balance.
True False |
| 28. | General capital assets financed wholly or partially through collections of special assessments are recorded in the same manner as any other general capital assets in the governmental activities category at the government-wide level.
True False |
| 29. | If all asset, liability, and fund equity accounts of a capital projects fund were closed during a certain fiscal year, it is unnecessary to prepare any financial statements for that fund for that year.
True False |
| 30. | Under a service concession arrangement, a government transfers the rights and obligations of an asset to another legally separate governmental or private sector entity.
True False |
Multiple Choice Questions
| 31. | Which of the following would be considered a general capital asset?
|
| 32. | Capital assets used by governmental funds should be reported in:
|
| 33. | GASB standards require that general capital assets be recorded in the fund statements at:
|
| 34. | GASB standards require that general capital assets be recorded in the government-wide statements at:
|
| 35. | The following items were included in Castle City’s General Fund expenditures for the year ended June.
How much should be classified as capital assets in Castle City’s General Fund balance sheet at June 30?
|
| 36. | The following items were included in Castle City’s General Fund expenditures for the year ended June
How much should be classified as capital assets in Castle City’s government-wide statement of net position at June 30?
|
| 37. | During the year, a wealthy local merchant donated a building to the City of Rosewood. The original cost of the building was $300,000. Accumulated depreciation at the date of the gift amounted to $250,000. The appraised fair market value of the donation at the date of the gift was $600,000, of which $40,000 was the value of the land on which the building was situated. At what amount should this contribution be recorded in the governmental activities accounts at the government-wide level?
|
| 38. | During the year, a wealthy local merchant donated a building to the city of Rosewood. The original cost of the building was $300,000. Accumulated depreciation at the date of the gift amounted to $250,000. The appraised fair market value of the donation at the date of the gift was $600,000, of which $40,000 was the value of the land on which the building was situated. At what amount should Rosewood record this donated property in the General Fund?
|
| 39. | Which of the following is not a required disclosure about each major class of capital assets?
|
| 40. | The City of Oak Park constructed a new storage facility using the city’s own public works employees. Construction costs were incurred in the amount of $900,000, plus $25,000 in interest on short-term notes used to finance construction. What amount should be capitalized in the government-wide statements?
|
| 41. | The following general capital assets were owned by the Town of Otterville:
What amount should be recorded as capital assets in the town’s governmental activities accounts?
|
| 42. | Equipment that had been acquired several years ago by a special revenue fund at a cost of $40,000 was sold for $15,000 cash. Accumulated depreciation of $30,000 existed at the time of the sale. The journal entry to be made in the governmental activities journal will include all of the following except:
|
| 43. | Equipment that had been acquired several years ago by a special revenue fund at a cost of $40,000 was sold for $15,000 cash. Accumulated depreciation of $30,000 existed at the time of the sale. The journal entry to be made in the special revenue fund will include:
|
| 44. | How should a capital lease for a general capital asset be recorded in the governmental activities accounts at the inception of the lease?
|
| 45. | How should a capital lease for a general capital asset be recorded in the General Fund accounts at the inception of the lease?
|
| 46. | The City of Castle Rock issued bonds at par for the construction of a new city office building. Receipt of the bond proceeds would result in journal entries in which funds?
|
| 47. | A government enters into a capital lease for the purchase of a new snow plow. The present value of the future lease payments is $845,500 and there is a down payment at the inception of the lease of $25,000. The snow plow should be recorded in the General Fund at:
|
| 48. | A government enters into a capital lease for the purchase of a new snow plow. The present value of the future lease payments is $845,500 and there is a down payment at the inception of the lease of $25,000. The snow plow should be recorded in the government-wide statement of net position at:
|
| 49. | Which of the following statements is correct regarding depreciation?
|
| 50. | Four new computers, for which the cost exceeded the city’s capitalization threshold, were purchased for use in the city clerk’s office using General Fund resources. Which of the following entries would be required to completely record this transaction?
|
| 51. | A capital projects fund might be used to account for which of the following activities?
|
| 52. | Which of the following is true regarding capital projects funds?
|
| 53. | In 2017, Sunrise City signed a contract in the amount of $8,000,000 for the construction of a new city hall. Expenditures were $4,000,000 in 2017 and $2,050,000 in 2018, which included a change to the original construction design in the amount of $50,000. What amount should be added to capital assets in the governmental activities accounts in 2018?
|
| 54. | To offset engineering and design costs incurred prior to the issuance of a long-term bond issue, a capital projects fund borrowed the sum of $75,000 on a short-term basis from First National Bank. This transaction should be recorded in:
|
| 55. | Transfers from the General Fund to the capital projects fund to provide partial financing of a capital project would be reported by the capital projects fund as a(an):
|
| 56. | Which of the following statements is correct concerning interest expenditures incurred during the period of construction of capital projects?
|
| 57. | When part of a progress payment for construction is withheld until final settlement of the contract, what account is credited?
|
| 58. | The following balances are included in the subsidiary records of Carrollwood:
What is the total amount of general capital assets held by the town?
|
| 59. | Which of the following activities or transactions would normally not be accounted for in a capital projects fund?
|
| 60. | A city recorded an asset impairment to a Public Works facility. Which of the following is correct concerning the recording of the amount of the asset impairment?
|
| 61. | A government experienced significant loss of certain roadways and bridges as a result of major flooding. Which of the following estimation approaches would be most useful in estimating the amount of asset impairment that has occurred?
|
| 62. | Premiums received on tax-supported bonds are generally transferred to what fund?
|
| 63. | Governments can opt not to capitalize collections or individual works of art or historical treasures if the collection is:
|
| 64. | Which of the following is not true for capital projects funds?
|
| 65. | In late April, the Acme Construction Co. submitted a $1,200,000 progress billing on a construction contract. On May 2, the bill was approved for payment, subject to a ten percent retention, as provided by the contract. Construction expenditures should be debited when:
|
| 66. | In late April, the Acme Construction Co. submitted a $1,200,000 progress billing on a construction contract. On May 2, the bill was approved for payment, subject to a ten percent retention, as provided by the contract. The amount that should be debited to Construction Expenditures is:
|
| 67. | At the inception of a capital lease for equipment the journal entry required in the capital projects fund will include which of the following?
|
| 68. | Which of the following is not a requirement that must be met to elect the “modified approach” to reporting certain eligible infrastructure assets?
|
| 69. | When a snowplow purchased by a government is received, it should be recorded in the governmental activities general journal as a(an):
|
| 70. | A general capital asset constructed several years ago by a capital projects fund was sold by the General Fund. Entries are necessary in the:
|
| 71. | In which of the following would it not be appropriate to record depreciation of capital assets?
|
| 72. | The Town of Golden purchased a squad car for the police department. If the operations of the police department are financed by general revenues, which of the following is correct concerning where the capital asset would be recorded?
|
| 73. | Which of the following statements regarding capital assets is not true?
|
| 74. | When a government transfers the rights and obligations of an asset to another legally separate governmental or private sector entity, the transaction is referred to as:
|
| 75. | Under a service concession arrangement,
|
Short Answer Questions
| 76. | The following key terms from Chapter 5 relate to general capital assets and capital projects:
A. Bond anticipation notes For each of the following definitions, indicate the key term from the list above that best matches the definition by placing the appropriate letter in the blank space next to the definition. _____ 1. A rental-type lease in which the risks and benefits of ownership are primarily those of the lessor
|
| 77. | If a city’s General Fund acquires a new copier under a capital lease agreement then,
1) The cost of the copier should be recorded in the ____________ general journal(s).
|
| 78. | What is the difference between using the modified approach to accounting for infrastructure assets and depreciating infrastructure assets?
|
| 79. | Under the modified approach, what happens if infrastructure assets are not maintained at or above the established condition level?
|
| 80. | If bonds are sold at a premium to finance a capital project, what important question arises concerning the premium? Discuss the proper accounting for a bond premium in the capital projects fund, the debt service fund, and the government-wide statements assuming that the premium must be reserved for debt service.
|
| 81. | Which expenditures of a capital projects fund should be capitalized to Construction Work in Progress? Is Construction Work in Progress included in the chart of accounts of a capital projects fund? If not, where would it be found?
|
Essay Questions
| 82. | The City of McNeely sold bonds in the amount of $25,000,000 to finance the construction of a public health center. The bonds are serial bonds and were sold at par on July 1, 2017 the first day of a fiscal year. Shortly thereafter a construction contract in the amount of $22,000,000 was signed and the contractor commenced work. By year-end the contractor had been paid in full for all billings to date amounting to $12,000,000.
Prepare, in general journal form, all journal entries that should have been made during the fiscal year ended June 30, 2018 to record the preceding information in the capital projects fund. (No closing entry is required).
|
| 83. | Prepare journal entries for the following related transactions in the fund and activity journals affected:
1. A capital projects fund issued $5,000,000, 4 percent bonds for $5,050,000 to finance improvements of a park. Premiums received are to be used to service the debt issue.
|
Chapter 05 Accounting for General Capital Assets and Capital Projects Answer Key
True / False Questions
| 1. | General capital assets should be distinguished from capital assets that are specifically associated with activities financed by proprietary and fiduciary funds, since capital assets acquired by proprietary and fiduciary funds are accounted for by those funds.
TRUE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-01 Describe the nature and characteristics of general capital assets. Topic: General Capital Assets |
| 2. | GASB standards require that all governmental expenditures for long-lived assets be accounted for by a capital projects fund.
FALSE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-03 Explain the purpose, characteristics, and typical financing sources of a capital projects fund. Topic: Capital Projects Funds |
| 3. | General capital assets purchased or constructed with governmental fund resources are recorded in the governmental activities general ledger at the government-wide level.
TRUE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-01 Describe the nature and characteristics of general capital assets. Topic: General Capital Assets |
| 4. | The disposal of a general capital asset, resulting in no revenue or expenditure to the government, is recorded only in the governmental activities accounts.
TRUE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-01 Describe the nature and characteristics of general capital assets. Topic: General Capital Assets |
| 5. | Historical cost includes acquisition cost less any ancillary costs necessary to put the asset into use.
FALSE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-01 Describe the nature and characteristics of general capital assets. Topic: General Capital Assets |
| 6. | Depreciation of general capital assets for the period should be reported in the statement of activities at the government-wide level.
TRUE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-01 Describe the nature and characteristics of general capital assets. Topic: General Capital Assets |
| 7. | GASB allows governments with a population below 100,000 to choose the modified approach, whereby they are not required to record depreciation on general capital assets.
FALSE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-01 Describe the nature and characteristics of general capital assets. Topic: General Capital Assets |
| 8. | Acquisition of a general capital asset represents an expenditure in a governmental fund, but requires capitalization of an asset at the government-wide level.
TRUE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 9. | While the GASB encourages capitalization of all collections or individual works of art or historical treasures, governments can opt not to capitalize if certain conditions exist.
TRUE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 10. | General capital assets acquired under capital leases should not be recorded in the governmental activities accounts.
FALSE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 11. | One of the required general capital asset disclosures is a schedule of the additions to, and deductions from, general capital assets during the course of a fiscal year.
TRUE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 12. | General capital assets acquired with capital projects fund resources would be recorded in essentially the same manner as if they had been acquired by the General Fund.
TRUE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-03 Explain the purpose, characteristics, and typical financing sources of a capital projects fund. Topic: Capital Projects Funds |
| 13. | Capital projects funds should use the modified accrual basis of accounting for revenues and expenses.
FALSE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-03 Explain the purpose, characteristics, and typical financing sources of a capital projects fund. Topic: Capital Projects Funds |
| 14. | Capital projects funds generally do not use the Encumbrances control account.
FALSE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-04 Prepare journal entries for a typical capital project, both at the fund level and within the governmental activities category at the government-wide level. Topic: Capital Projects Fund Accounting |
| 15. | In the capital projects fund general journal, Construction Work in Progress is the account used to capitalize the accumulated cost of partially-completed general capital assets.
FALSE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-04 Prepare journal entries for a typical capital project, both at the fund level and within the governmental activities category at the government-wide level. Topic: Capital Projects Fund Accounting |
| 16. | Intangible assets are defined by the GASB as capital assets that lack physical substance, have a useful life of more than one reporting period, and are nonfinancial in nature.
TRUE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-01 Describe the nature and characteristics of general capital assets. Topic: General Capital Assets |
| 17. | Proceeds of debt issued for the construction or acquisition of capital assets are recognized by the capital projects fund as “other financing sources” and as a liability in the governmental activities journal.
TRUE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-04 Prepare journal entries for a typical capital project, both at the fund level and within the governmental activities category at the government-wide level. Topic: Capital Projects Fund Accounting |
| 18. | It is common practice for a portion of contractor payments to be withheld in the capital projects fund until final inspection and acceptance of the asset under construction has occurred.
TRUE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-04 Prepare journal entries for a typical capital project, both at the fund level and within the governmental activities category at the government-wide level. Topic: Capital Projects Fund Accounting |
| 19. | The recorded premium on tax-supported bonds issued by a capital projects fund should be amortized at both the government-wide and fund levels.
FALSE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-04 Prepare journal entries for a typical capital project, both at the fund level and within the governmental activities category at the government-wide level. Topic: Capital Projects Fund Accounting |
| 20. | Interest incurred during construction of general capital assets cannot be capitalized as part of the cost of those assets.
TRUE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 21. | State laws often require that assets no longer needed in a capital projects fund be transferred to the fund that will service the debt incurred for the project, a debt service fund.
TRUE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-04 Prepare journal entries for a typical capital project, both at the fund level and within the governmental activities category at the government-wide level. Topic: Capital Projects Fund Accounting |
| 22. | Streets, curbs, and sidewalks constructed or acquired through use of capital projects fund resources should never be reported in the financial statements of a government because they are for the use of the public, not for use by the government.
FALSE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 23. | When a government experiences delays associated with a bond issuance, it is common practice to obtain temporary financing by use of bond anticipation notes.
TRUE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-04 Prepare journal entries for a typical capital project, both at the fund level and within the governmental activities category at the government-wide level. Topic: Capital Projects Fund Accounting |
| 24. | The acquisition of long-lived assets under an operating lease does not require any asset recognition in the accounts of any governmental fund.
TRUE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 25. | Water rights purchased by a city would be considered an intangible asset.
TRUE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 05-01 Describe the nature and characteristics of general capital assets. Topic: General Capital Assets |
| 26. | Capital projects funds differ from the General Fund and special revenue funds in that the latter categories have a year-to-year life, whereas capital projects funds have a project-life focus.
TRUE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-03 Explain the purpose, characteristics, and typical financing sources of a capital projects fund. Topic: Capital Projects Funds |
| 27. | If general capital assets are donated, revenue related to the donation is recognized in the governmental fund statement of revenue, expenditures and changes in fund balance.
FALSE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 28. | General capital assets financed wholly or partially through collections of special assessments are recorded in the same manner as any other general capital assets in the governmental activities category at the government-wide level.
TRUE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 29. | If all asset, liability, and fund equity accounts of a capital projects fund were closed during a certain fiscal year, it is unnecessary to prepare any financial statements for that fund for that year.
FALSE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 05-04 Prepare journal entries for a typical capital project, both at the fund level and within the governmental activities category at the government-wide level. Topic: Capital Projects Fund Accounting |
| 30. | Under a service concession arrangement, a government transfers the rights and obligations of an asset to another legally separate governmental or private sector entity.
TRUE |
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
Multiple Choice Questions
| 31. | Which of the following would be considered a general capital asset?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 05-01 Describe the nature and characteristics of general capital assets. Topic: General Capital Assets |
| 32. | Capital assets used by governmental funds should be reported in:
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 1 Easy Learning Objective: 05-01 Describe the nature and characteristics of general capital assets. Topic: General Capital Assets |
| 33. | GASB standards require that general capital assets be recorded in the fund statements at:
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 34. | GASB standards require that general capital assets be recorded in the government-wide statements at:
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 35. | The following items were included in Castle City’s General Fund expenditures for the year ended June.
How much should be classified as capital assets in Castle City’s General Fund balance sheet at June 30?
|
| AACSB: Knowledge Application AICPA: FN Reporting Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 36. | The following items were included in Castle City’s General Fund expenditures for the year ended June
How much should be classified as capital assets in Castle City’s government-wide statement of net position at June 30?
|
| AACSB: Knowledge Application AICPA: FN Reporting Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 37. | During the year, a wealthy local merchant donated a building to the City of Rosewood. The original cost of the building was $300,000. Accumulated depreciation at the date of the gift amounted to $250,000. The appraised fair market value of the donation at the date of the gift was $600,000, of which $40,000 was the value of the land on which the building was situated. At what amount should this contribution be recorded in the governmental activities accounts at the government-wide level?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 38. | During the year, a wealthy local merchant donated a building to the city of Rosewood. The original cost of the building was $300,000. Accumulated depreciation at the date of the gift amounted to $250,000. The appraised fair market value of the donation at the date of the gift was $600,000, of which $40,000 was the value of the land on which the building was situated. At what amount should Rosewood record this donated property in the General Fund?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 39. | Which of the following is not a required disclosure about each major class of capital assets?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-01 Describe the nature and characteristics of general capital assets. Topic: Required Disclosures about Capital Assets |
| 40. | The City of Oak Park constructed a new storage facility using the city’s own public works employees. Construction costs were incurred in the amount of $900,000, plus $25,000 in interest on short-term notes used to finance construction. What amount should be capitalized in the government-wide statements?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 41. | The following general capital assets were owned by the Town of Otterville:
What amount should be recorded as capital assets in the town’s governmental activities accounts?
|
| AACSB: Knowledge Application AICPA: FN Reporting Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 42. | Equipment that had been acquired several years ago by a special revenue fund at a cost of $40,000 was sold for $15,000 cash. Accumulated depreciation of $30,000 existed at the time of the sale. The journal entry to be made in the governmental activities journal will include all of the following except:
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 43. | Equipment that had been acquired several years ago by a special revenue fund at a cost of $40,000 was sold for $15,000 cash. Accumulated depreciation of $30,000 existed at the time of the sale. The journal entry to be made in the special revenue fund will include:
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 44. | How should a capital lease for a general capital asset be recorded in the governmental activities accounts at the inception of the lease?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 45. | How should a capital lease for a general capital asset be recorded in the General Fund accounts at the inception of the lease?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 46. | The City of Castle Rock issued bonds at par for the construction of a new city office building. Receipt of the bond proceeds would result in journal entries in which funds?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-03 Explain the purpose, characteristics, and typical financing sources of a capital projects fund. Topic: Capital Projects Funds |
| 47. | A government enters into a capital lease for the purchase of a new snow plow. The present value of the future lease payments is $845,500 and there is a down payment at the inception of the lease of $25,000. The snow plow should be recorded in the General Fund at:
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Capital Leases |
| 48. | A government enters into a capital lease for the purchase of a new snow plow. The present value of the future lease payments is $845,500 and there is a down payment at the inception of the lease of $25,000. The snow plow should be recorded in the government-wide statement of net position at:
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Capital Leases |
| 49. | Which of the following statements is correct regarding depreciation?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 50. | Four new computers, for which the cost exceeded the city’s capitalization threshold, were purchased for use in the city clerk’s office using General Fund resources. Which of the following entries would be required to completely record this transaction?
|
| AACSB: Knowledge Application AICPA: FN Reporting Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 51. | A capital projects fund might be used to account for which of the following activities?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-03 Explain the purpose, characteristics, and typical financing sources of a capital projects fund. Topic: Capital Projects Funds |
| 52. | Which of the following is true regarding capital projects funds?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-03 Explain the purpose, characteristics, and typical financing sources of a capital projects fund. Topic: Capital Projects Funds |
| 53. | In 2017, Sunrise City signed a contract in the amount of $8,000,000 for the construction of a new city hall. Expenditures were $4,000,000 in 2017 and $2,050,000 in 2018, which included a change to the original construction design in the amount of $50,000. What amount should be added to capital assets in the governmental activities accounts in 2018?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 54. | To offset engineering and design costs incurred prior to the issuance of a long-term bond issue, a capital projects fund borrowed the sum of $75,000 on a short-term basis from First National Bank. This transaction should be recorded in:
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-03 Explain the purpose, characteristics, and typical financing sources of a capital projects fund. Topic: Capital Projects Funds |
| 55. | Transfers from the General Fund to the capital projects fund to provide partial financing of a capital project would be reported by the capital projects fund as a(an):
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-03 Explain the purpose, characteristics, and typical financing sources of a capital projects fund. Topic: Capital Projects Funds |
| 56. | Which of the following statements is correct concerning interest expenditures incurred during the period of construction of capital projects?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 57. | When part of a progress payment for construction is withheld until final settlement of the contract, what account is credited?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-03 Explain the purpose, characteristics, and typical financing sources of a capital projects fund. Topic: Capital Projects Funds |
| 58. | The following balances are included in the subsidiary records of Carrollwood:
What is the total amount of general capital assets held by the town?
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| AACSB: Knowledge Application AICPA: FN Reporting Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-01 Describe the nature and characteristics of general capital assets. Topic: General Capital Assets |
| 59. | Which of the following activities or transactions would normally not be accounted for in a capital projects fund?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-03 Explain the purpose, characteristics, and typical financing sources of a capital projects fund. Topic: Capital Projects Funds |
| 60. | A city recorded an asset impairment to a Public Works facility. Which of the following is correct concerning the recording of the amount of the asset impairment?
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| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-04 Prepare journal entries for a typical capital project, both at the fund level and within the governmental activities category at the government-wide level. Topic: Accounting for General Capital Assets |
| 61. | A government experienced significant loss of certain roadways and bridges as a result of major flooding. Which of the following estimation approaches would be most useful in estimating the amount of asset impairment that has occurred?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 62. | Premiums received on tax-supported bonds are generally transferred to what fund?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-03 Explain the purpose, characteristics, and typical financing sources of a capital projects fund. Topic: Premiums on bonds |
| 63. | Governments can opt not to capitalize collections or individual works of art or historical treasures if the collection is:
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| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 64. | Which of the following is not true for capital projects funds?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-03 Explain the purpose, characteristics, and typical financing sources of a capital projects fund. Topic: Capital Projects Funds |
| 65. | In late April, the Acme Construction Co. submitted a $1,200,000 progress billing on a construction contract. On May 2, the bill was approved for payment, subject to a ten percent retention, as provided by the contract. Construction expenditures should be debited when:
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| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Remember Difficulty: 2 Medium Learning Objective: 05-04 Prepare journal entries for a typical capital project, both at the fund level and within the governmental activities category at the government-wide level. Topic: Accounting for General Capital Assets |
| 66. | In late April, the Acme Construction Co. submitted a $1,200,000 progress billing on a construction contract. On May 2, the bill was approved for payment, subject to a ten percent retention, as provided by the contract. The amount that should be debited to Construction Expenditures is:
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| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-04 Prepare journal entries for a typical capital project, both at the fund level and within the governmental activities category at the government-wide level. Topic: Accounting for General Capital Assets |
| 67. | At the inception of a capital lease for equipment the journal entry required in the capital projects fund will include which of the following?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Capital Leases |
| 68. | Which of the following is not a requirement that must be met to elect the “modified approach” to reporting certain eligible infrastructure assets?
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| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 69. | When a snowplow purchased by a government is received, it should be recorded in the governmental activities general journal as a(an):
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-04 Prepare journal entries for a typical capital project, both at the fund level and within the governmental activities category at the government-wide level. Topic: Accounting for General Capital Assets |
| 70. | A general capital asset constructed several years ago by a capital projects fund was sold by the General Fund. Entries are necessary in the:
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| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-04 Prepare journal entries for a typical capital project, both at the fund level and within the governmental activities category at the government-wide level. Topic: Accounting for General Capital Assets |
| 71. | In which of the following would it not be appropriate to record depreciation of capital assets?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-04 Prepare journal entries for a typical capital project, both at the fund level and within the governmental activities category at the government-wide level. Topic: Accounting for General Capital Assets |
| 72. | The Town of Golden purchased a squad car for the police department. If the operations of the police department are financed by general revenues, which of the following is correct concerning where the capital asset would be recorded?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-04 Prepare journal entries for a typical capital project, both at the fund level and within the governmental activities category at the government-wide level. Topic: Accounting for General Capital Assets |
| 73. | Which of the following statements regarding capital assets is not true?
|
| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-04 Prepare journal entries for a typical capital project, both at the fund level and within the governmental activities category at the government-wide level. Topic: Accounting for General Capital Assets |
| 74. | When a government transfers the rights and obligations of an asset to another legally separate governmental or private sector entity, the transaction is referred to as:
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| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Service concession arrangements |
| 75. | Under a service concession arrangement,
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| AACSB: Knowledge Application AICPA: FN Reporting Accessibility: Keyboard Navigation Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Service concession arrangements |
Short Answer Questions
| 76. | The following key terms from Chapter 5 relate to general capital assets and capital projects:
A. Bond anticipation notes For each of the following definitions, indicate the key term from the list above that best matches the definition by placing the appropriate letter in the blank space next to the definition. _____ 1. A rental-type lease in which the risks and benefits of ownership are primarily those of the lessor 1. H, 2. A, 3. B, 4. D, 5. F |
| AACSB: Knowledge Application AICPA: FN Reporting Blooms: Remember Difficulty: 1 Easy Learning Objective: 05-01 Describe the nature and characteristics of general capital assets. Topic: General Capital Assets |
| 77. | If a city’s General Fund acquires a new copier under a capital lease agreement then,
1) The cost of the copier should be recorded in the ____________ general journal(s). 1) General Fund and governmental activities general journals. |
| AACSB: Knowledge Application AICPA: FN Reporting Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-01 Describe the nature and characteristics of general capital assets. Topic: Capital Leases |
| 78. | What is the difference between using the modified approach to accounting for infrastructure assets and depreciating infrastructure assets?
The modified approach to accounting for infrastructure assets does not record an adjusting entry recognizing depreciation expense and accumulated depreciation. Rather the government reports, as an expense, the costs of maintaining the infrastructure assets at an established level or condition. By doing this the book value of the infrastructure asset remains unchanged (i.e., there is no accumulated depreciation). This is unlike the depreciation method, whereby the book value of the infrastructure assets decreases each time depreciation expense is recorded. |
| AACSB: Knowledge Application AICPA: FN Reporting Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 79. | Under the modified approach, what happens if infrastructure assets are not maintained at or above the established condition level?
If the government fails to maintain the assets at or above the established condition level, it must revert to reporting depreciation for its infrastructure assets and discontinue use of the modified approach. |
| AACSB: Knowledge Application AICPA: FN Reporting Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 80. | If bonds are sold at a premium to finance a capital project, what important question arises concerning the premium? Discuss the proper accounting for a bond premium in the capital projects fund, the debt service fund, and the government-wide statements assuming that the premium must be reserved for debt service.
If bonds sold to finance the construction of general capital assets are sold at a premium, the question arises as to whether or not the initial issue premium is required to be set aside for debt service or may remain in the capital projects fund. If bond indentures require that initial issue premiums be used for debt service, only the par value of the bonds is considered as an other financing source of the capital projects fund, and the premium is considered as an other financing source of the debt service fund. At the government-wide level, a premium would be recorded and should be amortized over the life of the bonds. |
| AACSB: Knowledge Application AICPA: FN Reporting Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-02 Account for general capital assets, including: acquisition, maintenance, depreciation, impairment, and disposition. Topic: Accounting for General Capital Assets |
| 81. | Which expenditures of a capital projects fund should be capitalized to Construction Work in Progress? Is Construction Work in Progress included in the chart of accounts of a capital projects fund? If not, where would it be found?
All ordinary and necessary costs to construct or acquire the asset are appropriately reported as construction work in progress. This includes all legal costs, engineering and architectural services, site preparation, materials used, and billings from contractors, among other items. Interest incurred during construction is not capitalized for general capital assets, however. Construction Work in Progress is found in the ledger for governmental activities at the government-wide level for general capital assets. This capital asset account is not found in the ledger of the capital projects fund. In the capital projects fund, all capitalizable items are debited to Construction Expenditures. |
| AACSB: Knowledge Application AICPA: FN Reporting Blooms: Understand Difficulty: 2 Medium Learning Objective: 05-04 Prepare journal entries for a typical capital project, both at the fund level and within the governmental activities category at the government-wide level. Topic: Accounting for General Capital Assets |
Essay Questions
| 82. | The City of McNeely sold bonds in the amount of $25,000,000 to finance the construction of a public health center. The bonds are serial bonds and were sold at par on July 1, 2017 the first day of a fiscal year. Shortly thereafter a construction contract in the amount of $22,000,000 was signed and the contractor commenced work. By year-end the contractor had been paid in full for all billings to date amounting to $12,000,000.
Prepare, in general journal form, all journal entries that should have been made during the fiscal year ended June 30, 2018 to record the preceding information in the capital projects fund. (No closing entry is required).
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| AACSB: Knowledge Application AICPA: FN Reporting Blooms: Understand Difficulty: 3 Hard Learning Objective: 05-04 Prepare journal entries for a typical capital project, both at the fund level and within the governmental activities category at the government-wide level. Topic: Accounting for General Capital Assets |
| 83. | Prepare journal entries for the following related transactions in the fund and activity journals affected:
1. A capital projects fund issued $5,000,000, 4 percent bonds for $5,050,000 to finance improvements of a park. Premiums received are to be used to service the debt issue.
(Note: This assumes the premium and interest are recorded directly in the debt service fund. If the premium and interest were first recorded in the capital projects fund, the capital projects fund would also credit Due to Debt Service Fund for $50,000.)
|
| AACSB: Knowledge Application AICPA: FN Reporting Blooms: Understand Difficulty: 3 Hard Learning Objective: 05-04 Prepare journal entries for a typical capital project, both at the fund level and within the governmental activities category at the government-wide level. Topic: Accounting for General Capital Assets |
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
