ACCT 302 and 410 HW
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acct410_hw1.docxE1-2 (Expenditures vs. Expenses) Family Services, a small social service nonprofit agency, began operations on January 1, 20X1, with $40,000 cash and $150,000 worth of equipment, on which $60,000 was owed on a note to City Bank. The equipment was expected to have a remaining useful life of 15 years with no salvage value. During its first year of operations, ending December 31, 20X1, Family Services paid or accrued the following:
1. Salaries and other personnel costs, $100,000.
2. Rent and utilities, $24,000.
3. Debt service—interest, $5,500, and payment on long-term note principal, $10,000.
4. Capital outlay—additional equipment purchased January 3, $30,000, expected to last 6 years and have a $6,000 salvage value.
5. Other current operating items paid with cash, $4,500.
There were no prepayals or unrecorded accruals at December 31, 20X1, and no additional debt was incurred during the year.
Compute for the Family Services agency, for the year ended December 31, 20X1, its total (a) expenses and (b) expenditures.
Expenses:
|
Depreciation (old equip)
|
$10,000 |
|
Depreciation (new equip) |
$4,000 |
|
Salaries and other costs |
$100,000 |
|
Rent and Utilities |
$24,000 |
|
Interest |
$5,500 |
|
Other Items |
$4,500 |
|
Total Expenses |
$148,000 |
|
Capital Outlay |
$30,000 |
|
Salaries and Other costs |
$100,000 |
|
Rent and Utilities |
$24,000 |
|
Interest |
$5,500 |
|
Loan repaid |
$10,000 |
|
Other Items |
$4,500 |
|
Total Expenditure |
$174,000 |
P1-4 (Internet Research Problem) Locate the GASB White Paper, “Why Governmental Accounting and Financial Reporting Is—and Should Be—Different,” on the Governmental Accounting Standards Board Web site. Prepare a brief summary and critical analysis of the White Paper.
E2-3 (Fund and Nonfund Accounts Identification) Indicate the fund or nonfund accounts that should be used to account for each of the following:
1. Tax revenues restricted for road maintenance. Special Revenue Funds
2. Resources restricted for construction of a new government office building. Capital Projects Fund
3. Typical water and sewer departments. Enterprise Fund
4. Unrestricted tax revenues. General Fund
5. School buildings. Capital Projects Fund
6. Bonds payable issued in a prior year for general government purposes. General Long-Term Liabilities and General Capital Assets
7. The portion of general government bonds payable that matures in the next fiscal year. General Long-Term Liabilities and General Capital Assets
8. Cash and investments of a bond sinking fund established to service general government long-term debt. Debt Service Fund
9. Capital assets of a government department that sells services to the public as the primary ongoing source of financing for its operations. Enterprise Fund
10. Long-term note for the government’s central motor pool that “rents” vehicles to other departments and agencies of the government at a rate that reimburses its costs. Internal Service Fund
