Accounting for Governmental & Nonprofit Entities
17th Edition
ISBN: 9780078025822
Author: Jacqueline L. Reck James E. Rooks Distinguished Professor, Suzanne Lowensohn, Earl R Wilson
Publisher: McGraw-Hill Education
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Question
Chapter 4, Problem 16.7EP
To determine
Find the correct option, the option that indicates the correct entry in the General Fund to record the repayment of tax anticipation notes.
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the Shannon Township Debt Service Fund accumulates resources to pay its $2 million general obligation debt. The debt is payable in equal annual installments of principal over 10 years with 5% interest on the unpaid principal. Prepare journal entries to record the following transactions in the Debt Service Fund. 1. The Township levies a special property tax amounting to $500,000 to pay debt service on its long-term general obligation debt. 2. All the property taxes levied for debt service purposes are collected. 3. The Township invests $150,000 in a six-month certificate of deposit. 4. Debt service (interest of $100,000 and principal of $200,000) becomes due to bondholders. 5. The certificate of deposit in c. matures and the Township receives a total of $153,000, which includes $3,000 of interest.
3. On the last day of the calendar year, the City of Soccerton borrowed $400,000 from the local
bank as a short-term loan in anticipation of property tax collections in the month of January. The
note is non-interest bearing, due in 30 days, and is discounted as a rate of 12% per year. Record
this transaction from two perspectives: 1) from the governmental activities' perspective on the
government-wide statements, and 2) from the General Fund perspective.
(1) From the governmental activities' perspective:
Date Account Name
12/31
(2) From the General Fund perspective
Date Account Name
12/31
Debit Credit
Debit
Credit
16
The Town of Heartland levied property taxes in the amount of $1,600,000. The town estimates that 1 percent will be uncollectible. The
journal entry to record the tax levy in the General Fund will include:
Multiple Choice
A debit to Cash for $1,584,000.
A credit to Revenues for $1,584,000.
A debit to Allowance for Uncollectible Current Taxes for $16,000.
A debit to Estimated Revenues for $1,600,000.
Chapter 4 Solutions
Accounting for Governmental & Nonprofit Entities
Ch. 4 - Prob. 1QCh. 4 - When preparing the statement or schedule of...Ch. 4 - Prob. 3QCh. 4 - During a recession citizens and governments see a...Ch. 4 - If the General Fund of a certain city needs...Ch. 4 - Prob. 6QCh. 4 - Explain why some governments may account for...Ch. 4 - Prob. 8QCh. 4 - Prob. 9QCh. 4 - Prob. 10Q
Ch. 4 - Prob. 12CCh. 4 - Prob. 14CCh. 4 - Choose the best answer. When equipment is...Ch. 4 - Goods for which a purchase order had been placed...Ch. 4 - Prob. 16.3EPCh. 4 - Garden City has calculated that General Fund...Ch. 4 - Prob. 16.5EPCh. 4 - Carroll City levies 200,000 of property taxes for...Ch. 4 - Prob. 16.7EPCh. 4 - Prob. 16.8EPCh. 4 - Prob. 16.9EPCh. 4 - Prob. 16.10EPCh. 4 - Prob. 17EPCh. 4 - Prob. 18EPCh. 4 - Prob. 19EPCh. 4 - At the end of fiscal year 2017, the City of...Ch. 4 - The City of Waterville applied for a grant from...Ch. 4 - Prob. 22EPCh. 4 - Prob. 23EPCh. 4 - Prob. 24EPCh. 4 - Prob. 25EP
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