Accounting For Governmental & Nonprofit Entities
18th Edition
ISBN: 9781259917059
Author: RECK, Jacqueline L., Lowensohn, Suzanne L., NEELY, Daniel G.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 8, Problem 20EP
Special Assessment Debt. (LO8-2) Residents of Green Acres, a gated community located in the City of Foothills, voted to form a local improvement district to fund the construction of a neighborhood park. The city agreed to administer the bonded debt; however, residents of Green Acres are solely responsible for repaying the bond issue. The following events are related to the special assessment park debt for the current fiscal year:
- 1. On January 1, the city assessed levies totaling $5,000,000 on properties within Green Acres. The levies are payable in 10 equal annual installments due at the end of the fiscal year, beginning in the current year, with 5 percent interest due on unpaid installments.
- 2. All assessments associated with the current year’s installment were collected by December 31, as was the interest due on the unpaid installments. A portion of assessments receivable equal to next year’s installment of $500,000 was reclassified as current.
- 3. On December 31, the first principal payment of $500,000 was made to bondholders, as was interest on the debt.
- 4. All additions and deductions were recorded by the custodial fund. Assume that all additions and deductions can be aggregated because resources are held less than three months.
Required
- a. What type of fund should the City of Foothills use to account for the special assessment debt?
- b. Make
journal entries for each of the foregoing events for the city. - c. How would this fund be reported in the City of Foothills’ financial statements?
- d. How would the special assessment debt be recorded in the City of Foothills’ financial statements?
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The City of Touchstone issued $1,000,000 general obligation bonds at 102 to build a new community center. As part of the bond issue, the city also paid a $2,500 underwriter fee and $4,000 in debt issue costs. What amount should the City of Touchstone report as other financing sources?
From Governmental Non-Profit Accounting Class
5. Al Shahri community, located in the City of Duqm, voted to form a local improvement district to fund the construction of a new community center. The city agreed to construct the community center and administer the bond debt; however, the community was solely responsible for repaying the bond issue. To administer the bond debt, the city established the Local Improvement District Fund. Following are several events connected with the Local Improvement District Fund.
1. On June 30, 2019, the city assessed levies totaling OMR3,000,000. The levies are payable in 10 equal annual installments with 4.5 percent interest on unpaid installments.
2. All assessments for the current period were collected by June 30, 2020, as was the interest due on the unpaid installments.
3. On July 1, 2020, the first principal payment of OMR 300,000 was made to bond holders as was interest on the debt.
Required
Make journal entries for each of the foregoing events that affected the Local Improvement District…
Provide journal entries for each transaction:
1. The city levied $300,000 of special property taxes that are restricted by statue and by bond indentures for the servicing of general obligation bonds. One percent (1%) of
the taxes is expected to be uncollectible.
2. The city collected $246,800 of property taxes before the due date for taxes. The remainder of the taxes receivable become delinquent.
3. The city levied interest and penalties of $6,650 on the overdue taxes receivable. $1,370 of the interest and penalties is expected to prove uncollectible. The interest and
penalties on taxes are restricted for debt service as well.
4. The city collected $41,040 of delinquent taxes and $5,130 of interest and penalties receivable.
5. The city wrote off uncollectible taxes receivable of $4,370 and related interest and penalties of $1,370.
6. Investments that cost $1,000,000 were sold for $1,050,000. Investment income is not restricted, but is retained in the fund to be used for debt service if…
Chapter 8 Solutions
Accounting For Governmental & Nonprofit Entities
Ch. 8 - What are the criteria for determining if a...Ch. 8 - Prob. 2QCh. 8 - Identify the different types of trust funds and...Ch. 8 - Describe the basic activities conducted by a tax...Ch. 8 - Explain how the financial reporting of fiduciary...Ch. 8 - Prob. 6QCh. 8 - How are external investment pool activities...Ch. 8 - What is a private-purpose trust fund? There are...Ch. 8 - Prob. 9QCh. 8 - Prob. 10Q
Ch. 8 - What is OPEB and how is OPEB reported by...Ch. 8 - Prob. 12CCh. 8 - Prob. 13CCh. 8 - Prob. 14CCh. 8 - Prob. 15CCh. 8 - Prob. 17.1EPCh. 8 - Which of the following is not a fiduciary fund? a....Ch. 8 - Prob. 17.3EPCh. 8 - Fiduciary fund activities are not included in the...Ch. 8 - Prob. 17.5EPCh. 8 - Prob. 17.6EPCh. 8 - The city has installed sidewalks using special...Ch. 8 - Prob. 17.8EPCh. 8 - Fiduciary funds a. Are accounted for using the...Ch. 8 - Prob. 17.10EPCh. 8 - Prob. 17.11EPCh. 8 - An investment trust fund would report in the...Ch. 8 - Prob. 17.13EPCh. 8 - Which pension fund financial statement or schedule...Ch. 8 - Prob. 17.15EPCh. 8 - Prob. 18.1EPCh. 8 - Prob. 18.2EPCh. 8 - The county collects taxes on behalf of the county,...Ch. 8 - Prob. 18.4EPCh. 8 - Prob. 18.5EPCh. 8 - At the date of the creation of the investment...Ch. 8 - The city council of the City of Great Falls...Ch. 8 - The city council of the City of Great Falls...Ch. 8 - Prob. 18.9EPCh. 8 - Prob. 18.10EPCh. 8 - Tax Custodial Fund. (LO8-2) The county collector...Ch. 8 - Special Assessment Debt. (LO8-2) Residents of...Ch. 8 - Identification of Fiduciary Funds. (LO8-2, LO8-3,...Ch. 8 - Investment Trust Fund. (LO8-3) The Albertville...Ch. 8 - Pass-through Custodial Funds. (LO8-2) Evergreen...Ch. 8 - Fiduciary Financial Statements. (LO8-4) Ray County...Ch. 8 - Fiduciary Fund Financial Statements. (LO8-4)...Ch. 8 - Prob. 26EPCh. 8 - Prob. 27EP
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