Answered: s on July 1,2015

Business

Accounting

s on July 1,2015

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 78IIP

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On June 1, 2020, the City of Cape May authorized the construction of a police station at an expected cost of $250,000. Financing will be provided through transfers from a Special Revenue Fund. The following transactions occurred during the fiscal year beginning June 1, 2020, relating to the Capital Project Fund. 1. The $250,000 receivable from the Special Revenue Fund was recorded. 2. The Special Revenue Fund transferred $125,000 to the Capital Project Fund to begin construction on the police station. 3. The Capital Project Fund invested the transfer of monies in a six-month certificate, at 5%. 4. A contract in the amount of $250,000 was let to the lowest bidder. 5. Architect and legal fees in the amount of $3,125 were approved for payment. There was no encumbrance for these expenditures. 6. Contract billings in the amount of $250,000 were approved for payment on the completion of the police station and the encumbrance was removed. 7. The six-month certificate was redeemed at maturity…
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2. The City of Katerah maintains its books and records in a manner that facilitates the preparation of fund financial statements. Prepare all necessary journal entries to record the city’s revenues from the following transactions for the year ended December 31, 2017. a.) On January 15, the city received notification that it had been awarded a $300,000 federal grant to assist in the operation of its “Meals on Wheels” program. The federal government expects to send the cash in about three months. This is not a reimbursement type grant and all eligibility requirements have been met. b.) In February the city spent $31,000 on “Meals on Wheels.” c.) In March, fines of $1,800 were issued for parking tickets. Payment must be made within 30 days, when the city has an enforceable legal claim to the amounts. d.) In April, the city received the $300,000 grant from the federal government. e.) In April, the city received $1,200 cash in payment of parking tickets issued in March. In addition, $100 of…
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