Capital Assets: Chapter 4 Solutions
CHAPTER 4: ACCOUNTING FOR GOVERNMENTAL OPERATING ACTIVITIES ( ILLUSTRATIVE TRANSACTIONS AND FINANCIAL STATEMENTS
Solutions to Exercises and Problems
4-2. 1. a. 6. a. 2. c. 7. c. 3. d. 8. c. 4. b. 9. b. 5. d. 10. b.
Ch. 4, Solutions (Cont’d)
4-3. a. Calculation of Estimated Required
Tax Anticipation Financing
Estimated Expenditure Requirements: Budgeted expenditures, remainder of FY 2011 $2,470,000 Current liabilities payable 830,000 $3,300,000
Estimated Resources Available: Cash on hand, April 1, 2011 740,000 Collections of budgeted FY 2011 revenues and delinquent property taxes, including interest and penalties 1,100,000 1,840,000
Estimated Amount of Required Tax Anticipation Note Financing $1,460,000
b. General Fund and Governmental Activities: Debits Credits CASH 1,460,000 TAX ANTICIPATION NOTES PAYABLE 1,460,000
b. General Fund: TAX ANTICIPATION NOTES PAYABLE 1,460,000 EXPENDITURES—2011 36,500 CASH 1,496,500
Governmental Activities: TAX ANTICIPATION NOTES PAYABLE 1,460,000 EXPENSES—INTEREST ON TANs 36,500 CASH 1,496,500
(Note: Interest on notes is $1,460,000 X .05 X 6/12 =$36,500)
4-4. a. Revenues = levy – (.02 X levy) = .98 X levy = $2,660,000
Levy = $2,660,000 ÷ .98 = $2,714,286 (rounded to nearest dollar)
Rate X (assessed valuation ÷ 100) = levy
Rate = levy ÷ (assessed valuation ÷ 100)
Rate = $2,714,286 ÷ 1,357,143 = $2.00 per $100 of assessed valuation
Debits Credits
b. TAXES RECEIVABLE—CURRENT 2,714,286 ESTIMATED UNCOLLECTIBLE CURRENT TAXES 54,286 REVENUES 2,660,000
c. CASH 2,540,000 TAXES RECEIVABLE—CURRENT 2,540,000
TAXES RECEIVABLE—DELINQUENT 174,286 TAXES RECEIVABLE—CURRENT 174,286
ESTIMATED UNCOLLECTIBLE
Solutions to Exercises and Problems
4-2. 1. a. 6. a. 2. c. 7. c. 3. d. 8. c. 4. b. 9. b. 5. d. 10. b.
Ch. 4, Solutions (Cont’d)
4-3. a. Calculation of Estimated Required
Tax Anticipation Financing
Estimated Expenditure Requirements: Budgeted expenditures, remainder of FY 2011 $2,470,000 Current liabilities payable 830,000 $3,300,000
Estimated Resources Available: Cash on hand, April 1, 2011 740,000 Collections of budgeted FY 2011 revenues and delinquent property taxes, including interest and penalties 1,100,000 1,840,000
Estimated Amount of Required Tax Anticipation Note Financing $1,460,000
b. General Fund and Governmental Activities: Debits Credits CASH 1,460,000 TAX ANTICIPATION NOTES PAYABLE 1,460,000
b. General Fund: TAX ANTICIPATION NOTES PAYABLE 1,460,000 EXPENDITURES—2011 36,500 CASH 1,496,500
Governmental Activities: TAX ANTICIPATION NOTES PAYABLE 1,460,000 EXPENSES—INTEREST ON TANs 36,500 CASH 1,496,500
(Note: Interest on notes is $1,460,000 X .05 X 6/12 =$36,500)
4-4. a. Revenues = levy – (.02 X levy) = .98 X levy = $2,660,000
Levy = $2,660,000 ÷ .98 = $2,714,286 (rounded to nearest dollar)
Rate X (assessed valuation ÷ 100) = levy
Rate = levy ÷ (assessed valuation ÷ 100)
Rate = $2,714,286 ÷ 1,357,143 = $2.00 per $100 of assessed valuation
Debits Credits
b. TAXES RECEIVABLE—CURRENT 2,714,286 ESTIMATED UNCOLLECTIBLE CURRENT TAXES 54,286 REVENUES 2,660,000
c. CASH 2,540,000 TAXES RECEIVABLE—CURRENT 2,540,000
TAXES RECEIVABLE—DELINQUENT 174,286 TAXES RECEIVABLE—CURRENT 174,286
ESTIMATED UNCOLLECTIBLE