A city government adds streetlights within its boundaries at a total cost of $336,000. These lights should burn for at least 12 years but can last significantly longer if maintained properly. The city develops a system to monitor these lights with the goal that 97 percent will be working at any one time. During the year, the city spends $50,200 to clean and repair the lights so that they are working according to the specified conditions. The city also spends another $87,600 to construct lights for several new streets. a. Prepare the entries assuming infrastructure assets are capitalized with depreciation recorded on government-wide financial statements. b. Prepare the entries assuming infrastructure assets are capitalized with government using the modified approach on government- wide financial statements. Complete this question by entering your answers in the tabs below. Required A Required B Prepare the entries assuming infrastructure assets are capitalized with depreciation recorded on government-wide financial statements. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

A city government adds streetlights within its boundaries at a total cost of $336,000. These lights should burn for at least 12 years but can last significantly longer if maintained properly. The city develops a system to monitor these lights with the goal that 97 percent will be working at any one time. During the year, the city spends $50,200 to clean and repair the lights so that they are working according to the specified conditions. The city also spends another $87,600 to construct lights for several new streets. a. Prepare the entries assuming infrastructure assets are capitalized with depreciation recorded on government-wide financial statements. b. Prepare the entries assuming infrastructure assets are capitalized with government using the modified approach on government- wide financial statements. Complete this question by entering your answers in the tabs below. Required A Required B Prepare the entries assuming infrastructure assets are capitalized with depreciation recorded on government-wide financial statements. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The City of Sunnyville’s General Fund has the following net resources at year end: $55,000 for LT Advance to an internal service fund $375,000 approved by the City Council with specific conditions for its use $2,500 of supplies inventory $60,000 state grant for snow removal $150,000 City Council resolution approved for funds to renovate city hall $400,000 to be used to fund government operations in the future Outstanding encumbrances of $80,000 for the purchase of furniture & fixtures What would be the total “Restricted” Fund balance? Select one: a. $275,000 b. $210,000 c. $150,000 d. $60,000
Every 10 years, the dome of the state capitol building has to be cleaned, sandblasted, and retouched. It costs $750,000 to complete the work. Using a 5% MARR, what is the capitalized cost for refurbishing the capitol dome?
Due to the high crime rate in the city center, the state council in partnership with the police has installed CCTV in several “hotspot” areas. The installation of the CCTV cost USD1000000. The cost of CCTV maintenance in the first year is USD500,000, USD700000 in the second year, USD950000 in the third year, USD990000 in the fourth year and costs are realized at the end of each year. On the other hand, the installation of CCTV will help to reduce crime in that area and is predicted to bring about a benefit of USD2000000 for the first and second year and a benefit of USD 3000000 for the third and fourth year. At the end of the fourth year, the CCTV will be replaced by a new one and it can be resold as second hand for USD200000. Assume the discount rate of 3% is used. Calculate the present value of net benefits assuming the benefits are realized at the end of each of the four years. Also, draw the timeline of benefits and costs. * Do we need included 'CCTV will be replaced by a new one'…
Fieldspring's city manager of public works has been reviewing flood data for his city and has determined a certain pattern to the associated costs. He wishes to start a perpetual fund for floods. The fund will make available $150,000 each year plus $450,000 every third year. Assume that he wants the first $150,000 made available now and can get an interest rate of 6.5%. (a) What is the EUAC of this proposed fund? Suggestion: Consider the CFD shown on the right. Find the EUAC using the A's and a A/F of the $450K of the 3rd year. $450K $150K same pattern 0 1 2 3 4 5 6... 0
A city has a solid waste landfill that was filled 12 percent in Year 1 and 26 percent in Year 2. During those periods, the government expected that total closure costs would be $2 million. As a result, it paid $50,000 to an environmental company on July 1 of each of these two years. Such payments will continue for several years to come. Indicate whether each of the following independent state-ments is true or false and briefly explain each answer. The city has a December 31 year-end.a. The government-wide financial statements will show a $230,000 expense in Year 2 but only if reported in an enterprise fund.b. The fund financial statements will show a $50,000 liability in Year 2 if this landfill is reported in the general fund.c. The fund financial statements will show a $50,000 liability at the end of Year 2 if this landfill is reported in an enterprise fund.d. If this landfill is reported in an enterprise fund, the government-wide financial statements and the fund financial statements…
Neighboring parishes in Louisiana have agreed to pool road tax resources already designated for bridge refurbishment. At a recent meeting, the engineers estimated that a total of $500,000 will be deposited at the end of next year into an account for the repair of old and safety-questionable bridges throughout the area. Further, they estimate that the deposits will increase by $100,000 per year for only 9 years thereafter, then cease. Determine the equivalent (a) present worth and (b) annual series amounts, if public funds earn at a rate of 5% per year. Draw also the cash flow diagram
Caring Shop is a gift shop located in The Natural History Museum. Caring shop has annual sales revenue of $850,000. Additionally, the Natural History museum has investment income of $550,000 from its endowment, and an annual operating budget of $3 million. Both the income from the gift shop and the endowment income are used to support the exempt purpose of the museum. The balance of funding required for annual operations is provided through admission fees. Dan Nolan, a new board member, does not understand why the museum is subject to tax at all, particularly because all of the entity's profits are used in carrying out the mission of the museum. Assume instead that the endowment income is reinvested in the endowment fund, rather than being used to support annual operations. Calculate the amount of unrelated business income.
A Government University has RO 15000 cash on hand in an appropriated fund. The University signs a purchase order for RO 7000 to purchase new projectors and systems deliverable in three months. The purpose of writing encumbrance in the ledger is:
A city starts a solid waste landfill that it expects to fill to capacity gradually over a 12-year period. At the end of the first year, it is 7 percent filled. At the end of the second year, it is 17 percent filled. Currently, the cost of closure and postclosure is estimated at $1 million. None of this amount will be paid until the landfill has reached its capacity. If this landfill is judged to be a proprietary fund, what liability will be reported at the end of the second year on fund financial statements? a. $100,000. b. $180,000. c. $170,000. d. $0.
In response to a petition signed by the property owners of Riverdale Subdivision, the city of Pewaukee will oversee the installation of sidewalks, curbs, and gutters in the subdivision, to be accounted for in the city’s capital projects fund. Pewaukee reports on a calendar-year basis. Construction is estimated to cost $900,000 and will be financed by a $100,000 county grant, a $50,000 transfer from the city’s general fund, and special assessments of $750,000 to be levied against subdivision property owners. One-third of the levy is to be due on February 1 of each year, starting with 2018. The first $250,000 installment will be received by the capital projects fund directly. The remaining installments will be collected by the debt service fund and will be used to service the related bond debt. The project is to begin on January 15, 2018, and is to take 18 months to complete. It is estimated that 70% of the work will be completed during 2018.To cover construction costs, a 6%, $500,000…
Roads and Highways Department (RHD), Khulna has agreed to pool bridge and road toll-tax resources already designated for existing old bridge refurbishment. At a recent RHD meeting, the engineers estimated that a total of $500,000 will be deposited at the end of next year into an account for the repair of old and safety questionable bridges throughout the area. Further, they estimate that the deposits will increase by $100,000 per year for only 9 years thereafter, then cease. Determine the equivalent (a) present worth and (b) annual series amounts, if public funds earn at a rate 4% per year.
Altona City opened a landfill that it elects to account for in an enterprise fund. At the time the landfill was opened the government estimated total capacity of the landfill to be 5 million cubic feet, useful life to be 20 years, and total closure and postclosure costs to be $18 million. At the end of Year 1, the government reestimated total closure costs to be $18.3 million and estimated capacity to be same as the original estimate. At the end of Year 2, the government reestimated total capacity to be 4.8 million cubic feet and total closure costs to be $18.5 million. At the end of Year 3, the government reestimated useful life to be 17 years but capacity remained unchanged from the preceding year and closure and postclosure costs were estimated to be $18.4 million. REQUIRED: Prepare journal entries in the enterprise fund to record the following events. a)During Year 1, the city estimates that 300,000 cubic feet of capacity were used. Record the landfill expense. b)During…