Question 1

The Village of Wisteria Lane purchased 10 new police cruisers on January 1 at a total cost of $240,000. An additional $60,000 is being spent to paint the village's name and logo and vehicle number on the vehicles and add necessary lighting and other equipment. The cruisers will have an anticipated useful life of six years with no salvage value. As of the end of the first fiscal year December 31, the depreciation expense in the government-wide statement of activities should be

Accepted Answer

The depreciation expense on the new police cruisers can be calculated using straight-line depreciation method.

Total cost of cruisers = $240,000 
Additional cost for equipment and painting = $60,000 
Total cost of cruiser + equipment + painting = $300,000

Depreciation expense per year = (Total cost of cruiser + equipment + painting) ÷ Useful life in years 
= $300,000 ÷ 6 
= $50,000

Therefore, the depreciation expense in the government-wide statement of activities as of the end of the first fiscal year December 31 should be $50,000.

Question 2

A government establishes a Permanent Fund to account for a donation. The earnings from the donation are to be used to purchase books for the library. How should the donation be reported in the Permanent Fund statement of revenues, expenditures and changes in fund balance?

Accepted Answer

The donation is a source of income for the government's Permanent Fund, hence it should be reported under revenues.

Question 3

Which of the following accounts would not be included in a government's General Capital Assets accounts?

Accepted Answer

The answer of Which of the following accounts would not...

Question 4

A general government department of a county government donated a capital asset with an original cost of $40,000 and accumulated depreciation of $15,000 to one of the county's proprietary funds. The proprietary fund would record the transaction as a

Accepted Answer

The proprietary fund would record the transaction as a debit to capital assets of $25,000 (the original cost of $40,000 minus the accumulated depreciation of $15,000) and a credit to capital contribution. This is because the donation of the asset represents a contribution of capital to the proprietary fund.

Question 5

A government received insurance proceeds of $35,000 in the General Fund for water and smoke damage that occurred at City Hall. What journal entry best describes the accounting treatment in the General Fund for the receipt of these funds?

Accepted Answer

The insurance proceeds are considered an other financing source, as they are not related to any ongoing operations or regular revenue streams. Therefore, the entry should be a debit to cash and a credit to other financing sources to reflect the increase in available funds for the government to use.

Question 6

An enterprise fund in Bobby County donated a vehicle that had an original cost of $50,000 to one of the County's general government departments. The net book value of the vehicle as of the date of donation was $15,000. The enterprise fund would record the transaction as a

Accepted Answer

The answer of An enterprise fund in Bobby County donated...

Question 7

Which of the following accounts would not be included in a government's General Capital Assets accounts?

Accepted Answer

Unrestricted net position is not a capital asset and would not be included in the government's General Capital Assets accounts. The other three choices are all related to capital assets and would typically be included in those accounts.

Question 8

If the governing body contributes $65,000 from the General Fund to a Debt Service Fund, the General Fund statements should report

Accepted Answer

This transaction represents an other financing use because the General Fund is transferring funds to a Debt Service Fund to pay for debt service payments.

Question 9

A government has the following general government capital assets: Streets and roads-$17,000
Buildings-$20,000
Equipment-$4,000
Assets acquired under capital leases-$1,000
What is the minimum amount of general capital assets the government may report under GAAP?

Accepted Answer

The answer of A government has the following general government...

Question 10

A government has the following debt:
 -Capital lease liabilities General Fund department leases-$3,200,000.
-Unfunded pension contributions long-term associated with general government employees-$1,000,000.
-General government bonds that mature in the next fiscal year-$5,000,000.
What amount of debt should be reported in the General Long-Term Liabilities accounts?

Accepted Answer

All three types of debt mentioned in the question should be reported in the General Long-Term Liabilities accounts as they are all long-term liabilities. Therefore, the total amount of the debt should be calculated as follows:

Capital lease liabilities: $3,200,000 
Unfunded pension contributions: $1,000,000 
General government bonds: $5,000,000

Total: $9,200,000

Quiz 9: General Capital Assets; General Long-Term Liabilities; Permanent Fundsintroduction to Interfund-Gca-Gltl Accounting

A government establishes a Permanent Fund to account for a donation. The earnings from the donation are to be used to purchase books for the library. How should the donation be reported in the Permanent Fund statement of revenues, expenditures and changes in fund balance?

Which of the following accounts would not be included in a government's General Capital Assets accounts?

A general government department of a county government donated a capital asset with an original cost of $40,000 and accumulated depreciation of $15,000 to one of the county's proprietary funds. The proprietary fund would record the transaction as a

A government received insurance proceeds of $35,000 in the General Fund for water and smoke damage that occurred at City Hall. What journal entry best describes the accounting treatment in the General Fund for the receipt of these funds?

An enterprise fund in Bobby County donated a vehicle that had an original cost of $50,000 to one of the County's general government departments. The net book value of the vehicle as of the date of donation was $15,000. The enterprise fund would record the transaction as a

Which of the following accounts would not be included in a government's General Capital Assets accounts?

If the governing body contributes $65,000 from the General Fund to a Debt Service Fund, the General Fund statements should report

A government has the following general government capital assets: Streets and roads-$17,000 Buildings-$20,000 Equipment-$4,000 Assets acquired under capital leases-$1,000 What is the minimum amount of general capital assets the government may report under GAAP?