The essential differences between revenues and other financing sources

 

3–5. Explain the essential differences between revenues and other financing sources and between expenditures and other financing uses. How is each of these items reported on the governmental funds statement of revenues, expenditures, and changes in fund balances.

3–15 Accounting Information Systems. In reading Appendix, A of this chapter, you may have been struck by the fact that many governmental accounting information (GAI) software systems appear to be incapable of handling the full reporting requirements of a governmental entity. A 2006 Market Research Report published by the Government Finance Officers Association (GFOA) titled “Budgeting Technology Solutions” categorized available software into three types: Excel Add-on, Corporate Performance Management (CPM) Systems, and Relational Systems. Write a two- to three-page paper discussing the current status of governmental accounting information (GAI) software. Describe the three types of software identified in the GFOA report. What (if any) progress has been made since the GFOA’s 2006 report? Have additional types of software been identified and/or developed? What does the future hold for GAI software?

3– 18 Recording Budget and Ending Fund Balances. The following information is
provided about the Town of York’s General Fund operating statement and budgetary accounts for the fiscal year ended September 30, 2016. (Note: The town
has no restricted, committed, or assigned fund balances.)
Estimated revenues $32,150,000
Revenues 32,190,000
Appropriations 32,175,000
Expenditures 32,185,000
Fund Balance—Unassigned September 30, 2015 500,000
Required
a. Prepare the journal entry to record the budget.
b. Did the Town of York engage in imprudent budgeting practice by authorizing a greater amount of expenditures than revenues estimated for the year, or potentially violate town or state balanced-budget laws?
c. Calculate the end-of-year balance for the Fund Balance—Unassigned that would be reported on the town’s balance sheet prepared as of September 30, 2016. Show all necessary work.

4–4. During a recession citizens and governments see a substantial decline in the value of homes. How might this decline in value impact a government’s gross property tax levy?
4–13 Research Case—Delinquent Taxes. When property taxes become delinquent, governmental entities often accrue interest and penalties on the delinquent taxes or choose to sell the rights to collect such taxes, interest, and penalties to external parties. Select a local municipality of your choice. Using information from the government’s Web site, respond to the questions below. (Hint: Search for delinquent tax collection process, delinquent property taxes—FAQs, tax lien, etc.)
Required
a. What happens if a taxpayer fails to pay property taxes on time? When do taxes become delinquent? What happens if a taxpayer fails to pay delinquent taxes? At what point does a tax lien attach to the property? What interest charges and other penalties or fees are assessed to the delinquent taxpayer?
b. If delinquent property taxes or tax liens are sold at public auction, what rights are purchased by the buyer? Is there a possibility, at some point in time, that the tax lien buyers can attain legal title to the property for which they hold the tax lien? (This may be called a treasurer’s deed.) If so, describe this process.

4–18 On July 1, 2017, the beginning of its fiscal year, Ridgedale County recorded gross property tax levies of $4,200,000. The county estimated that 5 percent of the taxes levied would be uncollectible. As of April 30, 2018, the due date for all property taxes, the county had collected $3,900,000 in taxes. The county-imposed penalties and interest in the amount of $14,500 but only expects to collect $12,800 of that amount. At the end of the fiscal year (June 30, 2018), the county had collected $53,000 in delinquent taxes and $4,800 in interest and penalties on the delinquent taxes.
Required
a. Prepare journal entries to record the tax levy on July 1, 2017, in the General Fund. (Ignore all entries in the governmental activities journal.)
b. Prepare a summary journal entry to record the collection of taxes as of April 30.
c. Prepare the journal entry necessary to reclassify the uncollected tax amounts as delinquent.
d. Prepare the journal entry necessary to record interest and penalties.
e. Prepare a summary journal entry to record the collection of delinquent taxes,
interest, and penalties.
f. How does the reporting of revenues from taxes differ from a for-profit company’s recording of revenues and uncollectible accounts?
g. Suppose that a portion of the delinquent taxes considered collectible will not be collected until November of 2018 (i.e., more than 60 days after year-end). Would this information affect the accounting treatment of the taxes?

Sample Solution

Reflective observation: before the first seminar began I was made aware that we would be split in to groups this made me feel anxious as I had no idea who my group members would be and what they would be like. During the seminar I felt relief when I knew I was in a group with a friend of mine but I was still nervous and felt apprehensive towards the other group members. However as I introduced myself to the other members and they introduced themselves to me I felt my anxiety lessen as found by (Marletta, Sarli, Caricati & Mancini, 2017). Although apprehensive and anxious I was excited about the opportunity to make more friends and get to know more of my class mates. The other thing that I found to be anxiety provoking was the thought of the presentation and the fact that I had to rely on other people to produce a good standard of work to be complied in the presentation. I had to rely on the rest of the group members having good presentation skills I think it’s this reason why I decided to take the lead for the first few sessions which could have resulted in some members not feeling able to speak up this has also been found in MDTs by Lichtenstein et al. 2004. I felt angry and irritated about some members lack of commitment as not everyone turned up to every meeting with some people missing meetings more than one occasion I found this to be frustrating as it produced anxiety about the quality of the information within the presentation. Research has found that the group dynamic is effected by each members dedication to the end goal the presentation (Forsyth, 2018). As a results of this the absent members received a debrief of what we disused at the meeting from me. At points I might have been a bit overbearing and my frustration may have come across. As we discussed how we wanted to present our presentation I felt confused as there was a suggestion by a team member that we should all dress up as e.g. a psychiatrist and other suggestions (right before we presented our presentation to the class) of using a stick man to explain our chosen roles. This all produced heated debate which

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