(9 & 10) State and Local Gov 1 & 2

Question 1

Journal Entry to record the execution of a capital lease in Gov funds. (current financial resources measurement)

Answer 1

DR: Capital Outlay
CR: Other Financing Sources

PV rate X NBV

Question 2

J/E to record a first payment of a capital lease at year end.

Answer 2

DR: Debt Service Expenditure - Principal
DR: Debt Service Expenditure - Interest
CR: Cash

The amounts are calculated as follows: interest rate X the PV of capital lease.

Question 3

J/E to record Depr of Cap lease in gov fund financial reporting

Answer 3

Depre is not recorded as current resources measurement focus used for gov funds doesnt include recognition of non-current assets, thererore no depr is recognized.

Question 4

J/E to record supplies inventory under fund accounting

Answer 4

DR: Inventory
CR: Fund Balance - Non-spendable

Question 5

J/E to record supplies expnditure

Answer 5

DR: Expenditures
CR: Cash

Based on amounts purchased, not amounts used.

Question 6

Formula to Reconcile Governament Fund Balance Sheet to the Governament-wide Statement of Net Position:

Answer 6

(CAN)
\+Capital assets
-Related accumulated depr.
-Non-current liabilities
\+Service fund net position
\+Internal service fund
\+Transfers

Question 7

Formula to Reconcile Government Fund Statement of Revenues, Expenditures, and Changes in Fund Balance to the Gov-wide Statement of Activities:

Answer 7

(CPA'S) (RIDES IT)
\+Capital outlays
\+Principal payments
-Assets disposure
-SubTract other financing sources

\+Recognize revenue earned
\+Interest expense
\+Depr expense
\+Entry for Consolidation
\+Service Fund (Internally)
\+Interfund 
\+Transfers

Question 8

Where does GASB Statement No. 34, Basic Financial Statements and Management’s Discussion and Analysis for State and Local Governments, require fund financial statements for major funds to be presented?

Answer 8

The major fund financial statements are presented before the notes to the financial statements, as part of the basic financial statements, not RSI.

Question 9

Which is the measurement focus of government-wide statements:

Answer 9

GASB 34 requires the economic resources measurement focus and accrual basis of accounting for all amounts in the government-wide financial statements.

Question 10

When do encumbrances increase?

Answer 10

When PO’s are approved