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The U.S. Office of Management and Budget (OMB) provides guidance on the allowability of costs under federal grant agreements in Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Following is a list of costs being considered for reimbursement under a federal grant:
_____ 1. Publication costs for electronic and print media, including distribution, promotion, and general handling.
_____ 2. Alcoholic beverages purchased to host a foreign dignitary.
_____ 3. Value Added Tax (VAT) charged for the purchase of goods or services that a nonfederal entity is legally required to pay to a foreign country.
_____ 4.
_____ 5. Recruiting costs.
_____ 6. Employee dependent care costs.
_____ 7. Costs of contributions and donations.
_____ 8. Necessary and reasonable expenses incurred for security to protect facilities, personnel, and work products.
Required
For each of the costs listed, indicate with an A (allowable) if the cost is always allowable under OMB guidance, an N (nonallowable) if the cost is not allowable under OMB guidance, and an M (may be allowable) if the cost is allowable under specific circumstances. For any costs marked with an M, explain the circumstance necessary for the cost to be allowable.
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Chapter 12 Solutions
Accounting For Governmental And Not For Profit Entities
- Richard has the following potential liabilities: William, a former employee, has sued Richard for $880,000. Richard contacted his attorney, and the case is believed to be frivolous. Carter sued Richard for an undisclosed amount for a class action lawsuit. Richard thinks it's frivolous, but his attorneys indicate a loss is probable for $88,000. Charles sued Richard because he slipped outside of Richard's store. The claim is $264,000 and Richard is certain he will lose the case but believes Charles will settle. The attorneys agree and based on conversations with Charles's attorneys, have stated that it is remote the claim will be settled for $255,200. Charles's attorneys indicated he would be willing to accept either cash of $242,000 or shares of Richard's closely-held common stock currently valued at $233,200. Richard would prefer not to settle in cash. Richard is suing William for $264,000 because William is in violation of a non-compete agreement he has with Richard. Richard is…arrow_forwardNeed answer the financial accounting question not use aiarrow_forwardHow much were SMS's liabilities on these general accounting question?arrow_forward
