Q1. (Preparation of governmental funds financial statements)
Following are December 31, 2013 pre-closing trial balances (budgetary accounts excluded) for the General Fund, Debt Service Fund, and Capital Projects Fund for Hebert County. Prepare a governmental funds balance sheet and a statement of revenues, expenditures, and changes in fund balances as of and for the year ended December 31, 2013. The General Fund had encumbrances of $25 outstanding on December 31, 2013. (All amounts are in thousands of dollars.) (2.5 marks)
Debits Credits
General Fund
Cash $1,900
Property taxes receivable – delinquent 330
Allowance for uncollectible property taxes $ 10
Accounts payable 120
Deferred revenues 250
Unassigned fund balance, January 1, 2013 1,720
Revenues – property taxes 3,200
Revenues – licenses and fees 350
Revenues – parks admissions fees 40
Investment income 220
Expenditures – general government 360
Expenditures – public safety 1,800
Expenditures – public works 840
Expenditures – parks and culture 350
Transfer out to Debt Service Fund 250
Transfer out to Capital Projects Fund 80 ____ Totals $5,910 $5,910
Debt Service Fund
Cash $70
Assigned fund balance, January 1, 2013 $60
Expenditures – bond principal 110
Expenditures – interest 130
Transfer in from General Fund ___ 250
Totals $310 $310
Capital Projects Fund
Cash $240
Expenditures – capital outlay 420
Transfer in from General Fund $80
Proceeds of bonds ___ 580
Totals $660 $660
QUESTION-2
The following transactions relate to the Scott Business venture. Which two of the following six possibilities occurred as a result of each transaction – an asset increased, an asset decreased, a Liability increased, a liability decreased, equity increased, or equity decreased:
(SHOW INCREASE (+) DECREASE (-) (5 marks)
- Scott invests $20,000 cash to start the business in return for stock.
- Purchased supplies paying $1,000 cash.
- Purchased equipment for $15,000 cash.
- Purchased Supplies of $200 and Equipment of $1,000 on account.
- Borrowed $4,000 from 1st American Bank.
- Provided consulting services receiving $3,000 cash.
- Paid salaries of $800 to employees.
- Dividends of $500 are paid to shareholders
- $ 1000 amount paid to the creditor against equipment purchase
- Paid outstanding electricity bills $ 500
Q3. From the below statement whether the following are true or false. For the false items, explain why they are false. (2.5 marks)
- Enterprise Funds are used only when all services are provided to non-governmental entities, and Internal Service Funds are used only when all services are provided to governmental agencies that are a part of the reporting government.
- Enterprise Funds use the economic resources measurement focus and full accrual basis of accounting only when they want to compute the costs of services; otherwise, they use the current financial resources measurement focus and modified accrual basis of accounting.
- The primary activities of the State Office of General Services and the State Parks Department are financed from General Fund appropriations. The former department also operates a governmental motor pool and the latter operates a public swimming pool. Because their primary activities are financed from the General Fund, they may not under any circumstances account for other activities in proprietary funds.
Question no. 4
What are the Approaches that Financial Statement and Financial Condition can be analyzed?
(2.5 marks)
Answer
Question 5
X Y Z football association uses the following types of funds for the football team’s purposes: Using General Fund; Specific Purpose Funds; Plant Replacement and Expansion Fund; and Endowment Fund. State which fund (or funds) would be used to account for each of these transactions or events. (2.5 marks)
a-His Excellency has given 5 million SR an additional amount as an aid to the football team to promote the football game.
b- Minister has given fund an amount 10 Million SR, to be used exclusively making a new football ground for adding new place and location for practicing football.
c- An amount of 20 Million SR, paid to a foreign football coach for special training to the players to be used exclusively for training.
d-An amount of 3 million SR has been paid to the star players of the years as a reward.
e-As per the government plan, an amount of 20 million will be paid to the football teams to encourage the newcomer’s football players.
Answer:
