Government‐wide statements are on a full accrual basis; fund statements are on a modified accrual basis.The East Eanes School District engaged in or was affected by the following events and transactions during its fiscal year ending June 30, 2021.Teachers and other personnel earned $350,000 in vacations and other compensated absences that they did not take but for which they expect to be paid in the future.The district settled a suit brought by a student, agreeing to pay $3 million by December 31, 2022.The district issued $8 million in GO bonds to finance an addition to its high school. By year‐end, it had expended $1 million in construction costs.The district signed a one‐year (i.e., short‐term) lease for office space. Rent, which the county paid in its entirety, is $40,000 per year.It acquired school buses and other vehicles, financing them with an eight‐year lease. Annual lease payments are $140,000. Had the district purchased the equipment outright, the price would have been $869,371, reflecting an interest rate of 6 percent.The district transferred $500,000, representing the final year's principal payment, to a reserve fund required by the bond indenture.To smooth out cash flows, the district issued 90‐day tax anticipation notes of $950,000.The district paid teachers and other personnel $150,000 for compensated absences earned in previous years.For each event, prepare the entries (as required) to record the transactions in the general fund or whatever other governmental fund seems most appropriate.Prepare the entries that would be needed to reflect the transactions and events in the district's government‐wide statements.

2) Expenditure due on accrual basis : No entry on modified accrual basis 3) Expenditure due on accrual basis : No entry on modified accrual basis 4) Bank A/c Dr 8,000,000 To GO Bonds Cr 8,000,000 (Being bonds worth 8 millions issued) 5) Construction Cost DR 1,000,000 To bank A/c Cr 1,000,000 (Being counstruction cost incurred)6) District Fund Dr 500000 To Bond Reserve Fund Cr 500000 (Being fund transfered to bond reserve account) 8) Leave encashmant Dr 150000 To Bank a/c Cr 150000 (Being compensated absences paid to teachers) Remarks :- All the journal entries would be routed through Fund account. Net balance would be either surplus or deficiency for fund

Answered: Government‐wide statements are on a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Government‐wide statements are on a full accrual basis; fund statements are on a modified accrual basis.

The East Eanes School District engaged in or was affected by the following events and transactions during its fiscal year ending June 30, 2021.

Teachers and other personnel earned $350,000 in vacations and other compensated absences that they did not take but for which they expect to be paid in the future.
The district settled a suit brought by a student, agreeing to pay $3 million by December 31, 2022.
The district issued $8 million in GO bonds to finance an addition to its high school. By year‐end, it had expended $1 million in construction costs.
The district signed a one‐year (i.e., short‐term) lease for office space. Rent, which the county paid in its entirety, is $40,000 per year.
It acquired school buses and other vehicles, financing them with an eight‐year lease. Annual lease payments are $140,000. Had the district purchased the equipment outright, the price would have been $869,371, reflecting an interest rate of 6 percent.
The district transferred $500,000, representing the final year's principal payment, to a reserve fund required by the bond indenture.
To smooth out cash flows, the district issued 90‐day tax anticipation notes of $950,000.
The district paid teachers and other personnel $150,000 for compensated absences earned in previous years.
1. For each event, prepare the entries (as required) to record the transactions in the general fund or whatever other governmental fund seems most appropriate.
2. Prepare the entries that would be needed to reflect the transactions and events in the district's government‐wide statements.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

I have two questions. Fund 1 and 7 are not included because $350,000 in vacations and other compensated absences to be paid in the future and the district issuing 90‐day tax anticipation notes of $950,000?

Solution

by Bartleby Expert

SEE SOLUTION

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.