Culver City recognizes as revenues/expenditures those amounts collected/paid during the year or within 60 days of fiscal year-end. The City offers a pension benefit to its employees who meet certain age and years of employment criteria. The City participates in the State Pension Plan. The City s actuarially determined contribution requirement to the State Pension Plan for the fiscal year ended 6/30/07 is $4 million. Due to cash inflow shortages the City, which budgeted $4 million for pension payments, paid only $3 million in the fiscal year ended 6/30/07. The City paid the remaining amount on September 30, 2007. Assuming the City maintains its books and records in a manner that facilitates the preparation of its fund financial statements, what is the appropriate entry to record the pension payments and recognize any associated liability? a. Debit Expenditures $4 million; Credit Cash $3 million and Pension Payable $1 million. b. Debit Expenses $4 million; Credit Cash $3 million and Pension Payable $1 million. c. Debit Expenditures $3 million; Credit Cash $3 million. d. Debit Expenses $3 million; Credit Cash $3 million
1. Culver City recognizes as revenues/expenditures those amounts collected/paid during the year or within 60 days of fiscal year-end. The City offers a pension benefit to its employees who meet certain age and years of employment criteria. The City participates in the State Pension Plan. The City s actuarially determined contribution requirement to the State Pension Plan for the fiscal year ended 6/30/07 is $4 million. Due to
a. Debit Expenditures $4 million; Credit Cash $3 million and Pension Payable $1 million.
b. Debit Expenses $4 million; Credit Cash $3 million and Pension Payable $1 million.
c. Debit Expenditures $3 million; Credit Cash $3 million.
d. Debit Expenses $3 million; Credit Cash $3 million.
2. Culver City recognizes as revenues/expenditures those amounts collected/paid during the year or within 60 days of fiscal year-end. The City offers a pension benefit to its employees who meet certain age and years of employment criteria. The City participates in the State Pension Plan. The City s actuarially determined contribution requirement to the State Pension Plan for the fiscal year ended 6/3/07 is $4 million. Due to cash inflow shortages the City, which budgeted $4 million for pension payments, paid only $3 million in the fiscal year ended 6/30/07. The City paid the remaining amount on September 30, 2007. Assuming the City maintains its books and records in a manner that facilitates the preparation of the government-wide financial statements, what is the appropriate entry to record the pension payments and recognize any associated liability?
a. Debit Expenditures $4 million; Credit Cash $3 million and Pension Payable $1 million.
b. Debit Expenses $4 million; Credit Cash $3 million and Pension Payable $1 million.
c. Debit Expenditures $3 million; Credit Cash $3 million.
d. Debit Expenses $3 million; Credit Cash $3 million.
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