Active TopicsActive Topics  Display List of Forum MembersMemberlist  Search The ForumSearch  HelpHelp
  RegisterRegister  LoginLogin
FAR STUDY GROUP
 CPAnet Forum : FAR STUDY GROUP
Subject Topic: governmental accounting (Topic Closed Topic Closed) Post ReplyPost New Topic
  
Author
Message << Prev Topic | Next Topic >>
venchlu
Major Contributor
Major Contributor


Joined: 18 Aug 2009
Location: United States
Online Status: Offline
Posts: 587
Posted: 17 May 2010 at 10:11 | IP Logged  

The City of Richardson reported a change in fund balances of $2,002,000 in its governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balances for the year ended December 31, 2004.  Additional information:

 

1.    Capital outlay expenditures amounted to $10,000,000 in the modified accrual statement.  General government fixed asses amounted to $160,000,000 excluding land and had an average life of 20 years.

2.    The modified accrual statement reported proceeds from the sale of land in the amount of $1,000,000.  The land had a basis of $800,000.

3.   Property taxes had been levied in the amount of $20,000,000.  It was estimated that 3% would be uncollected, that $1,000,000 would be collected within 60 days of year-end, and that $400,000 would be collected more than 60 days from year-end.  The City had recognized the maximum permitted under modified accrual accounting.

4.   $370,000 of property taxes had been deferred at the end of the previous year and was recognized under modified accrual as revenue in the current year.

5.    The modified accrual statement reflected debt service expenditures in the amount of $1,000,000 for interest and $1,500,000 for principal.  No adjustment was necessary for interest accruals at year-end.

6.    Compensated absences charges, on the full accrual basis, amounted to $100,000 more than under the modified accrual basis.

 

The change in net assets in the governmental column in the government-wide Statement of Activities for the year ended December 31, 2004 are:

A.    4,602,000

B.    5,202,000

C.    3,832,000

D.    4,632,000

 

The correct answer is D. Geez…I have really trouble figuring out the answer- especially 3, and 4. I would really appreciate if someone can show me 3 and 4.

1.       we have to add back 10,000,000 and subtract out 8,000,000

2.       we have to subtract 1,000,000 and add back 200,000

5. We have to add back 1,500,000

6. We have to subtract 100,000

That is all I know at this point. Thanks !



__________________
REG 91
BEC 89
AUD 88
MA certified
FAR 94
Back to Top View venchlu's Profile Search for other posts by venchlu
 
CharliePetApple
Regular
Regular


Joined: 30 Oct 2009
Location: United States
Online Status: Offline
Posts: 173
Posted: 17 May 2010 at 16:36 | IP Logged  

3. we have to add 400,000 as acrrued tax revenue ( collected after 60 days)

4. deduct 370,000 tax deferred at the end of the previous year, cause under accrual accounting it is not current year revenue, but deferred tax liability recognized in prevoius year



__________________
BEC - PASS 11/17/09 Wiley 2008
AUD - PASS 02/25/10 Wiley 2008
REG - PASS 03/23/10 Wiley 2010
FAR - PASS 06/22/10 Wiley 2010
There is no failure except in no longer trying
Back to Top View CharliePetApple's Profile Search for other posts by CharliePetApple
 
venchlu
Major Contributor
Major Contributor


Joined: 18 Aug 2009
Location: United States
Online Status: Offline
Posts: 587
Posted: 17 May 2010 at 16:40 | IP Logged  

Hi Charliepieapple...

U make my day basically...it is so simple after ur explanation...thanks !



__________________
REG 91
BEC 89
AUD 88
MA certified
FAR 94
Back to Top View venchlu's Profile Search for other posts by venchlu
 
CharliePetApple
Regular
Regular


Joined: 30 Oct 2009
Location: United States
Online Status: Offline
Posts: 173
Posted: 17 May 2010 at 16:47 | IP Logged  

no problem, good luck! and thanks for the good question - makes you think

__________________
BEC - PASS 11/17/09 Wiley 2008
AUD - PASS 02/25/10 Wiley 2008
REG - PASS 03/23/10 Wiley 2010
FAR - PASS 06/22/10 Wiley 2010
There is no failure except in no longer trying
Back to Top View CharliePetApple's Profile Search for other posts by CharliePetApple
 
hoaquynh
Newbie
Newbie


Joined: 01 Jul 2010
Online Status: Offline
Posts: 13
Posted: 09 Sep 2010 at 20:32 | IP Logged  

Hello everyone,

Can someone please explain caculation for each item in this problem?  I understand items #3 & 4, but totally lost with the rest? 

Thank you.

Back to Top View hoaquynh's Profile Search for other posts by hoaquynh
 



Sorry, you can NOT post a reply.
This topic is closed.


  Post ReplyPost New Topic
Printable version Printable version

Forum Jump
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot delete your posts in this forum
You cannot edit your posts in this forum
You cannot create polls in this forum
You cannot vote in polls in this forum

Powered by Web Wiz Forums version 7.9
Copyright ©2001-2010 Web Wiz Guide

This page was generated in 0.0938 seconds.

Copyright © 1996-2016 CPAnet/MizWeb Communities All Rights Reserved
Twitter
|Facebook |CPA Exam Club | About | Contact | Newsletter | Advertise & Promote