sunnydelite
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Joined: 07 Jul 2010
Location: United States
Online Status: Offline
Posts: 109
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| Posted: 23 Jul 2010 at 16:11 | IP Logged
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Becker-Final review question from Ch9.
I posted it yesterday, but got no result.
The City of Thayer Point reported Revenues over
Expenditures of $25,000 for all governmental funds for
the year ended December 31, 20X2. The city had capital
outlay of $600,000 partially funded by debt proceeds of
$500,000 at December 31, 20X2. The city paid $219,000 of
debt service expenditures during the 20X2 year comprised
of principal payments of $500,000 and interest payments
of $119,000. Interest of 4 percent is due every six
months on April 1 and October 1 on total debt reported at
December 31, 20X1 of $3,000,000. The increase (decrease)
in net assets to be reported for the City's governmental
activities displayed on their government-wide Statement
of Activities is:
$226,000
$225,000
$224,000
$125,000
The correct answer is $226,000
Net changes in fund balance ; ; 25,000
Other financial sources ;
Debt Proceeds &nbs p; -$500,000
Expenditures(Capital outlay, principal payments)
Capital Outl ay ; $600,000 &nb
sp;
Principal payments on Debt $100,000
$700,000
Basis of Accounting &n bsp;
Additional accrued ;
Revenue and Expense ;
Prior year accrual ;
Balance at 20X1 $3,000,000 &nbs p;
Interest rate 4%
Accrual period, 4 months $30,000
Current year accrual ;
Balance at 20X1 $3,000,000 &nbs p;
Less principal payment -$100,000 &n
bsp;
Balance at 20X2 $2,900,000 &nbs p;
Interest rate 4%
Accrual period, 4 months -$29,000
Government wide Change in net assets $226,000
Can you please explain why the interest accrual period is
4 months in both years? thanks
Second post,
please help, thanks!!!
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Topic: Second post, please help, thanks!!!
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