Question 1

Describe the accounting required by the GASB for municipal solid waste landfill closure and post closure care costs.(It is not necessary to describe footnote disclosures).

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Question 2

Describe the requirements for disclosure of segment information for enterprise funds.

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Question 3

As of July 1,2013,the City of Saratoga Springs decided to purchase a privately operated swimming pool and to create a Swimming Pool (Enterprise)Fund.During the year,the following transactions occurred:
(a)A permanent contribution of $ 800,000 was received from the General Fund.
(b)$ 1,000,000 was borrowed with a Note Payable from a local bank at an interest rate of 6%.
(c)Purchased for cash several items,the cost breakdown was:
 land,$300,000; building,$400,000,land improvement,$400,000; equipment,$200,000; supplies,$190,000.
(d)Charges for services amounted to $600,000,all received in cash.
(e)Cash expenses included:
 salaries,$200,000; utilities,$100,000; interest (paid on 6/30/2014),$60,000.
(f)Supplies were consumed in the amount of $120,000.
(g)Depreciation was recorded for:
 building,$20,000,land improvement,$40,000; equipment,$20,000.
(h)The books were closed.Close all accounts to Net Assets.
Required:
1.Record the above transactions in general journal form (on the books of the swimming pool fund).2.Prepare,in good form,a Statement of Revenues,Expenses,and Changes in Fund Net Assets for the City of Saratoga Springs Swimming Pool Fund for the Year Ended June 30,2014.3.Prepare,in good form,a Statement of Fund Net Assets for the City of Saratoga Springs Swimming Pool Fund as of June 30,2014.4.Prepare,in good form,a Statement of Cash Flows for the City of Saratoga Springs Swimming Pool Fund for the Year Ended June 30,2014.Assume all of the revenue bonds payable are for capital-related acquisitions and that the transfer was to establish working capital (i.e.a non-capital-related purpose).

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Question 4

Why might it be desirable for an enterprise fund to operate at a profit?

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Question 5

Under GASB Statement 34,enterprise funds must be used under which circumstances?

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Question 6

Describe the differences in cash flow statements required by GASB standards when compared with cash flow statements required by FASB standards.

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Question 7

Describe the accounting required for risk management activities of governmental units when the government is self-insured.

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Question 8

The Village of Lake George decided to establish an internal service fund to account for the operations of a Print Shop.The Print Shop is to begin operations on July 1,2013 the first day of the City's fiscal year.During the fiscal year ended June 30,2014 the following transactions occurred:
(a)The General Fund made a permanent contribution of $400,000 and a long-term advance of $800,000 to the Print Shop Fund.The advance is to be repaid by the Print Shop Fund in four equal annual installments; the first installment is due 6/30/2014.The advance is non-interest bearing and is considered issued for the purchases of equipment.
(b)During the year equipment was purchased (for cash)in the amount of $ 890,000.
(c)During the year,printing supplies costing $120,000 were purchased; all but $30,000 was paid in cash.
(d)Billings to departments during the year totaled $ 400,000 at selling price.All but $50,000 was received in cash.
(e)The cost of supplies used during the year totaled $73,000;
(f)Salaries and wages were $19,000 and utilities were $3,000 (all paid in cash); and
(g)Depreciation was charged on equipment,$80,000.
(h)The first installment of the advance was repaid.
Required:
1.Prepare journal entries in the general journal of the Village of Lake George Print Shop Fund to reflect the above transactions.2.Prepare closing entries for the year.3.Prepare,in good form,the equity section of the Statement of Net Assets for the Village of Lake George Print Shop Fund as of June 30,2014.

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Question 9

A city government has decided to build and operate a convention center.Identify what factors should be considered in deciding whether to account for the convention center as an Enterprise Fund or as part of general governmental activities?

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Question 10

The following Statement of Cash Receipts and Disbursements was prepared by the bookkeeper of The Anchorage Arboretum Authority.The Arboretum Authority is a component unit of the City of Anchorage and must be included in the City's financial statements.It began operations on January 1,2014 with no outstanding liabilities or commitments and only 2 assets:
 (1)$15,000 cash and (2)land that it had paid $ 23,000 to acquire.
  •The loan from the bank is dated April 1 and is for a five year period.Interest (4% annual rate)is paid on Oct.1 and April 1 of each year,beginning October 1,2014.
•The machinery was purchased on April 1 with the proceeds provided by the bank loan and has an estimated useful life of 10 years.(straight-line basis)
•Supplies on hand amounted to $ 3,760 at December 31,2014.These included $650 of fertilizer that was received on December 29 and paid in January 2015.All other bills and salaries related to 2014 had been paid by close of business on December 31.
Required:
Part A.Prepare a Statement of Revenues,Expenses and Changes in Net Assets for the year ended 12-31-09 for the Arboretum assuming the City plans to account for its activities on the accrual basis.
Part B.Prepare a Statement of Revenues,Expenditures and Changes in Fund Balance for the year ended 12-31-09 for the Arboretum assuming the City plans to account for its activities on the modified accrual basis.

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Quiz 6: Proprietary Funds