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.

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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

 

Answer

 

 

 

 

 

 

 

 

 

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)

 

1. Scott invests $20,000 cash to start the business in return for stock.
2. Purchased supplies paying $1,000 cash.
3. Purchased equipment for $15,000 cash.
4. Purchased Supplies of $200 and Equipment of $1,000 on account.
5. Borrowed $4,000 from 1st American Bank.
6. Provided consulting services receiving $3,000 cash.
7. Paid salaries of $800 to employees.
8. Dividends of $500 are paid to shareholders
9. $ 1000 amount paid to the creditor against equipment purchase
10. Paid outstanding electricity bills $ 500

ANSWER:

 

 

 

 

 

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: