Question

In: Accounting

For the following situations, make adjusting entries necessary to prepare government-wide financial statements. Where appropriate, take...

For the following situations, make adjusting entries necessary to prepare government-wide financial statements. Where appropriate, take account of the amounts reported in the fund-level financial statements.  

A) To prepare its government-wide financial statements for the year ended December 31, 2015, the city reported a $900,000 long-term liability for estimated judgments and claims. At December 31, 2016, the city estimated that the long-term liability would be $935,000. (Hint: Carry forward the starting liability and adjust for the increase.)

B) A city instituted a new sales tax starting January 1, 2015. It collected $600,000 of sales taxes during 2015. When the city prepared its fund-level statements, it accrued an additional $200,000 for sales taxes remitted by larger businesses in January, 2016, for taxes collected in the fourth quarter of 2015. However, smaller businesses are not required to remit fourth quarter collections until April, 2017. No accrual was made for those taxes, which were estimated to be $28,000.

C) See facts in situation b. For the calendar year 2016, the city reported sales taxes of $800,000 in its fund-level financial statements. This amount includes all taxes collected in 2016 (applicable to 2016 and 2015), as well as the accrual for larger merchant remittances in January, 2017. The accrual does not include estimated remittances of $35,000 from smaller merchants in April, 2017.

Solutions

Expert Solution

The necessary adjustment entries to prepare government-wide financial statements are as follows-:

  1. Net position                                                                                         900,000

Judgments and claims expenses35,000

Judgments and claims liabilities935,0000

   

                                              (The adjustment could be in two entries, in which one carries forward for December 31, 2012, liability of 900,000)

  1. Sales taxes receivable                                                                            28,000

Revenues - sales taxes28,000

                             


Related Solutions

The following three separate situations require adjusting journal entries to prepare financial statements as
Question: The following three separate situations require adjusting journal entries to prepare financial statements asof April 30. For each situation, present both:∙ The April 30 adjusting entry.∙ The subsequent entry during May to record payment of the accrued expenses.Entries can draw from the following partial chart of accounts: Cash; Accounts Receivable; PrepaidInterest; Salaries Payable; Interest Payable; Legal Services Payable; Unearned Revenue; Revenue; SalariesExpense; Interest Expense; Legal Services Expense; Depreciation Expense.a. On April 1, the company retained an attorney for a...
Discuss and explain the process and journal entries required to prepare Government-Wide Financial Statements?
Discuss and explain the process and journal entries required to prepare Government-Wide Financial Statements?
Prepare the adjusting entry necessary on August 31 if financial statements are to be prepared at...
Prepare the adjusting entry necessary on August 31 if financial statements are to be prepared at that time. Some of the transactions of Torres Company during August are listed below. Torres uses the periodic inventory method. August 10 Purchased merchandise on account, $31,400, terms 2/10, n/30. 13 Returned part of the purchase of August 10, $1,500, and received credit on account. 15 Purchased merchandise on account, $36,200, terms 1/10, n/60. 25 Purchased merchandise on account, $42,600, terms 2/10, n/30. 28...
Journalize the attached adjusting entries Prepare the necessary adjusting entries at December 31 for Staples, Inc....
Journalize the attached adjusting entries Prepare the necessary adjusting entries at December 31 for Staples, Inc. based on the information from problem 1 and the following information: 1. On November 1, 2013 the company borrowed 65,000 from a bank. The note requires principal and interest at 10% to be paid on April 30, 2014. 2. On December 1, 2013 the company received $3,000 in cash from another company that is renting office space in Staples’ building. The payment, representing rent...
1. Prepare the necessary adjusting journal entries for items a through h. Assume that adjusting entries...
1. Prepare the necessary adjusting journal entries for items a through h. Assume that adjusting entries are made only at year-end. [The following information applies to the questions displayed below.] Wells Technical Institute (WTI), a school owned by Tristana Wells, provides training to individuals who pay tuition directly to the school. WTI also offers training to groups in off-site locations. Its unadjusted trial balance as of December 31, 2017, follows. WTI initially records prepaid expenses and unearned revenues in balance...
Prepare any necessary adjusting entries on December 31, 2017, for Piper Company’s year-end financial statements for each of the following separate transactions and events
Question: Prepare any necessary adjusting entries on December 31, 2017, for Piper Company’s year-end financial statements for each of the following separate transactions and events. 1. Piper Company records a year-end entry for $10,000 of previously unrecorded cash sales (costing $5,000) and its sales taxes at a rate of 4%. 2. The company earned $50,000 of $125,000 previously received in advance and originally recorded as unearned services revenue
Chapter 9 Adjusting and Closing Entries for Governmental Activities, Government-wide Level; Preparation of Government-wide and Major...
Chapter 9 Adjusting and Closing Entries for Governmental Activities, Government-wide Level; Preparation of Government-wide and Major Fund Financial Statements Prior to preparing financial statements at the end of FY 2020, it is necessary to record depreciation expense for the year for governmental activities at the government-wide level. Based on general capital assets assigned to specific functions, depreciation expense related to equipment and infrastructure is allocated to functions as shown below:                                                                                                                                                                 Equipment               Infrastructure       General Government                  $   53,320      ...
The following data relate to the accounts of LIK Cooperation.  Prepare the necessary adjusting journal entries indicated...
The following data relate to the accounts of LIK Cooperation.  Prepare the necessary adjusting journal entries indicated by each item for the year ended December 31, 2018. A.        A four-year insurance policy was purchased on April 1, 2018.  The $96,000 insurance premium was fully paid on that date and a debit to prepaid insurance was recorded. B.        Unpaid salaries at year-end amount to $200,550. C.        Pruitt Corp. rents out some of its office space to Alliance Corp at $2,400 per month.  On November 1, 2018, Pruitt...
Prepare an adjusted trial balance. If an amount Ledger Accounts, Adjusting Entries, Financial Statements, and Closing...
Prepare an adjusted trial balance. If an amount Ledger Accounts, Adjusting Entries, Financial Statements, and Closing Entries; Optional Spreadsheet. The unadjusted trial balance of Recessive Interiors at January 31, 2019, the end of the year, follows: Recessive Interiors Unadjusted Trial Balance January 31, 2019 Debit Balances Credit Balances 11 Cash 13,100 13 Supplies 8,000 14 Prepaid Insurance 7,500 16 Equipment 113,000 17 Accumulated Depreciation—Equipment 12,000 18 Trucks 90,000 19 Accumulated Depreciation—Trucks 27,100 21 Accounts Payable 4,500 31 Jeanne McQuay, Capital...
Prepare necessary adjusting entries to correct the errors on all issues (ii) to (v) in the...
Prepare necessary adjusting entries to correct the errors on all issues (ii) to (v) in the financial statements of GHL for the year ended 31 March 2020 in accordance with relevant HKFRSs.   (ii) At 1 April 2019 there was a deferred tax liability of $6.6 million in the statement of financial position and no adjustments have been made to this figure at 31 March 2020. This deferred tax liability was solely in relation to the differences between the carrying amount...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT