EX 7-5Capital assets are accounted for in government fund statements on a modified accrual basis.The following summarizes the history of the Sharp City Recreation Center.1. In 1993, the city constructed the building at a cost of $1,500,000. Of this amount, $1,000,000 was financed with bonds and the balance from unrestricted city funds.2. In the 10 years from 1993 through 2002, the city recorded depreciation (as appropriate) based on an estimated useful life of 30 years.3. In the same period, the city repaid $750,000 of the bonds.4. In 2004, the city renovated the building at a cost of $3,000,000. The entire amount was financed with unrestricted city funds. The renovation was expected to extendthe useful life of the building so that it would last a total of 25 more years that is, until 2029.5. In the 15 years from 2004 through 2018, the city recorded depreciation (as appropriate). Depreciation was calculated by dividing the undepreciated balance of theoriginal cost, plus the costs of renovation, over the anticipated remaining life of 25 years.6. In the same period, the city repaid the $250,000 balance of the debt.7. In 2019, the city demolished the building so that the land on which it is situated could be converted into softball fields.a. Prepare the journal entries that the city would make in its governmental funds (e.g., its general fund or a capital projects fund).b. How would you recommend that the city maintain accounting control over the capital assets themselves - those you did not record as assets in the governmentalfunds?

Journal entries are used to record transactions in the books of account for a business entity.…

a. Prepare the journal entries that the city would make in its governmental funds (e.g., its general fund or a capital projects fund). b. How would you recommend that the city maintain accounting control over the capital assets themselves- those you did not record as assets in the governmental funds?

a. Prepare the journal entries that the city would make in its governmental funds (e.g., its general fund or a capital projects fund). b. How would you recommend that the city maintain accounting control over the capital assets themselves- those you did not record as assets in the governmental funds?

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

Justify the presentation of the required accounting and financial reports to a city, when it uses funds, such as Capital project funds or Debt services funds, including the notes to the reports?
Which of the following identifies the reason that we need reconciliations between governmental funds and government-wide governmental activities (select all that apply)? Internal service funds are often categorized as governmental funds. Governmental funds use the modified accrual basis of accounting, and the government-wide governmental activities use the accrual basis of accounting. Internal service funds are often categorized as governmental activities. Governmental funds use the accrual basis of accounting, and the government- wide governmental activities use the modified accrual basis of accounting.
Construction of a municipal courthouse would typically be accounted for using a: Group of answer choices a.) Capital projects fund b.) Permanent fund c.) General fund
A capital projects fund would probably not be used for which of the following assets? A. Construction and installation of new shelving in the mayor's office. B, Replacing a bridge. C. Financing and construction of three new fire substations. D. Purchase and installation of an entity-wide integrated computer system.