A government has claims and judgments outstanding at the beginning of 20X5 of $1,000,000. These claims and judgments are expected to result in awards against the government of $800,000. $75,000 of these claims is due and payable from the General Fund at December 31, 20X4. At the end of 20X5, the government has claims and judgments outstanding of $2,000,000. These claims and judgments are expected to result in awards against the government of $1,200,000. None of these claims are due and payable from the General Fund at December 31, 20X5. The government paid claims and judgments of $400,000 during 20X5. General Fund expenditures for claims and judgments for 20X5 should be reported at what amount?

Question

Quizplus · Accepted Answer

The General Fund expenditures for claims and judgments for 20X5 should be reported as $325,000. This is calculated by taking the $400,000 paid during 20X5 and subtracting the $75,000 that was due and payable at the end of 20X4, which was already accounted for in the previous year's expenditures.

A Government Has Claims and Judgments Outstanding at the Beginning