Following are several unrelated transactions involving a hospital. 1. The hospital has a contractual agreement with a lender requiring that $500,000 in cash be set aside to meet its future debt payment. 2. The hospital accrued $1,500,000 in patient service revenues. Charity services of $415,000 were also provided. Contractual adjustments total $535,000. 3. An increase of $45,000 was recorded for bad debts. 4. General services of $100,000 were donated by technicians. Normally, the hospital would have purchased these specialized services. 5. An endowment contribution of $1,500,000 was received. 6. Investments held by the hospital increased in fair value by $32,000. 7. The hospital purchased $837,000 in equipment with resources that had been contributed in prior years for such a purchase. Required: a. Prepare journal entries to record the foregoing transactions, assuming the hospital is a not-for-profit facility. b. Prepare journal entries to record the foregoing transactions, assuming the hospital is a business-type government facility.
> A small city has been awarded a federal grant, and the finance director is curious as to what costs might be allowable under the grant. To what source could the finance officer go to determine what costs are allowable under federal grants?
> In partnership with Jefferson County, Mound City recently established a Native American Heritage Center and Museum, organized as a tax-exempt not-for-profit organization. Although the facility does not charge admission, signs at the information desk in t
> How might activity-based costing (ABC) be useful in a government setting?
> What criteria must be met before a not-for-profit organization can record donated services? If the criteria are met, how should donated services be recorded? Give examples to support your answer.
> Explain the GASB’s role in developing standards for SEA reporting.
> What are the three broad categories of service efforts and accomplishments (SEA) measures?
> The Art League is a not-for-profit organization dedicated to promoting the arts within the community. There are two programs conducted by the Art League: (1) exhibition and sales of members’ art (referred to as Exhibition) and (2) Commu
> You have recently started working as the controller for a small county. The county is preparing its financial statements for the comprehensive annual financial report and you have been given the following statement for review. You know that in addition t
> The Shannon Community Kitchen provides hot meals to homeless and low-income individuals and families; it is the organization’s only program. It is the policy of the community kitchen to use temporarily restricted resources for which the purpose has been
> The Atkins Museum recently hired a new controller. His experience with managerial accounting and strong communication skills were extremely attractive. The new controller sent each member of the Board of Trustees’ Finance Committee a se
> The following information has been provided for the City of Elizabeth for its fiscal year ended June 30, 2017. The information provided relates to financial information reported on the city’s statement of net position and its total governmental funds bal
> Consider the following scenarios relating to activities that include a fund-raising appeal: 1. The Green Group’s mission is to protect the environment by increasing the portion of waste recycled by the public. The group conducts a door-to-door canvass of
> In November of 2011, the FASB announced two new projects related to financial reporting of not-for profit organizations. One of the projects was a research project that was subsequently dropped from the agenda; as a result, the standard-setting project w
> he GASB defines a financial reporting entity as the primary government and the entities for which the primary government is financially accountable. Following is a list of entities being considered for classification as primary governments. _____1. Wasec
> Choose the best answer. 1. The members of the Museum Board of the City of Springfield are appointed by the City of Springfield City Council, which has agreed to finance any operating deficits of the museum. Under these conditions: a. The museum is a prim
> Choose the best answer. 1. Which of the following organizations would be considered a nongovernmental not-for-profit organization? a. An organization that provides shelter for men who have been victims of domestic violence and has been designated as a no
> The following balances come from the trial balance of Wilson State College as of the end of the 2017 fiscal year. Required: a. Prepare a statement of revenues, expenses, and changes in net position for the year ended June 30, 2017, in good form. See I
> The following is the pre closing trial balance for Allen University as of June 30, 2017. Additional information related to net assets and the statement of cash flows is also provided. Additional Information N et assets released from temporary restri
> Following are several transactions involving a university. 1. In fiscal year 2017, the university was notified by the federal government that in 2018 it would receive a $500,000 grant for wetlands research. 2. The university received a $500,000 endowment
> The Statement of Net Position of South State University, a governmentally owned university, as of the end of its fiscal year June 30, 2016, follows. The following information pertains to the year ended June 30, 2017: 1. South billed tuition and fees
> Elizabeth College, a small private college, had the following transactions in fiscal year 2017. 1. Gross tuition and fees revenue totaled $5,600,000. Tuition waivers and scholarships of $346,000 were granted. Of the tuition waivers granted $276,400 was f
> Steiner College’s statement of financial position for the year ended June 30, 2016, is presented here. Steiner is a private college. The following transaction information (amounts in thousands) pertains to the year ended June 30, 20
> Choose the best answer. 1. Colleges and universities look to which standard-setting body for GAAP? a. The GASB. b. The FASB. c. The NACUBO. d. It depends on whether the entity is public, private, or for-profit. 2. Which of the following statements is pr
> For several years, Baytown Rehabilitative Camp for Disabled Children (hereafter referred to as the camp) has applied for an operating grant from the Baytown Area United Way. As the finance adviser for the local United Way allocation panel, it is your res
> INVOLVE was incorporated as a not-for-profit voluntary health and welfare organization on January 1, 2017. During the fiscal year ended December 31, 2017, the following transactions occurred. 1. A business donated rent-free office space to the organizati
> The statement of activities for the ECE Children’s Learning Center for fiscal year 2017, prepared by a newly hired budget employee with no NFP experience, is presented on the following page. Required: a. Because you are taking a not
> For each of the independent transactions listed in the left-hand column below, indicate which of the revenue or contribution classifications apply by choosing one or more of the letters from the listed items in the right-hand column. Choose all that appl
> The Kare Counseling Center was incorporated as a not-for-profit voluntary health and welfare organization 10 years ago. Its adjusted trial balance as of June 30, 2017, follows. 1. Salaries and fringe benefits were allocated to program services and su
> The Center to Advance Student Learning has presented its statement of financial position for the 2017 fiscal year. CENTER TO ADVANCE STUDENT LEARNING Statement of Financial Position As of December 31, 2017 Assets Cash and cash equi
> Section A provides a list of transactions or events that occurred during the year, followed by Section B, a list of the possible effects each transaction or event has on adjusting net position accounts at yearend, assuming that all temporary accounts hav
> Indicate whether each of the following donated services situations would require a journal entry for contribution revenue and a related expense or asset by circling Y for yes or N for no. Y N 1. Volunteers worked as sales assistants in a not-for-profit h
> As part of your audit firm’s quality control policies, it maintains a record of continuing profession education (CPE) taken by professional staff members. Following is information on some of the classes, sessions, workshops, and conferences that the audi
> Choose the best answer. 1. Evaluation of government financial performance is important for which of the following reasons? a. Credit analysts use it to determine whether bonds should be issued. b. Investors use it to make decisions about bond investments
> You work for an auditing firm that is performing a local government audit. The government has received federal grant funding, and the audit manager on the engagement has asked you to perform the necessary research and review the following costs charged t
> Choose the best answer. 1. Jan and Dean decided to form a charitable organization, I Love Rock N Rollers, to provide funding to assist former rock and roll group members who have become homeless. They are planning to hold a “mini-Woodstock” event to rais
> The complexity and uniqueness of the federal government makes it difficult to conduct a meaningful analysis of its financial condition. However, conducting a financial statement analysis does provide a better understanding of the federal government. To a
> Congress authorized the Flood Control Commission to start operations on October 1, 2017. Required: a. Record the following transactions in general journal form as they should appear in the accounts of the Flood Control Commission. Record all expenses in
> The trial balance of the Federal Antiquities Administration, as of August 31, 2017, follows: Required: Prepare a statement of budgetary resources for the 11 months ended August 31, 2017, assuming that goods on order at the end of the prior year amounte
> The Rural Assistance Agency operates three major programs as responsibility centers—the Food Bank, Housing Services, and Credit Counseling. Clients pay a fee for services on a sliding scale based on income. The following information is drawn from the acc
> Use the data from Problem 17–17 for this assignment. In completing the assignment assume that all assets are entity assets, F und Balance with Treasury is an intra governmental asset, and all other assets are governmental. Also, assume that Other Appro
> One amount is missing in the following trial balance of proprietary accounts, and another is missing from the trial balance of budgetary accounts of the Save Our Resources Commission of the federal government. This trial balance was prepared before budge
> Choose the best answer. 1. Which of the following represents one of the roles of the Government Accountability Office in federal financial accounting and reporting? a. Providing an independent assessment of the financial reports of the federal governmen
> You have recently started work as the controller for a small community hospital. The financial statements for the just completed fiscal year have been provided for your review. Required: After reviewing the statement you realize that it is not in th
> The Edwards Lake Community Hospital balance sheet as of December 31, 2016, follows. Required: a. Record in general journal form the effect of the following transactions during the fiscal year ended December 31, 2017, assuming that Edwards Lake Commun
> The City of Fort Collins, Colorado, has adopted the budgeting for outcomes entrepreneurial budgeting method as a basis for its budgeting process. Required: Locate the city’s most recent budget materials and answer the following questions: a. Why has the
> The following is the pre-closing trial balance for Christina Rehabilitation Hospital as of September 30, 2017. Required a. Prepare a statement of operations and a statement of changes in net assets for the year ended September 30, 2017. Not included
> During 2017, the following selected events and transactions were recorded by Milos County Hospital. 1. Gross charges for hospital services, all charged to accounts and notes receivable, were as follows: Patient service revenues………………………………………….$1,664,90
> During its current fiscal year, Evanston General Hospital, a not-for-profit health care organization, had the following revenue-related transactions (amounts summarized for the year). 1. Services provided to inpatients and outpatients amounted to $9,600,
> The Kyle Sports Medicine facility is a not-for-profit health care facility that is trying to determine what transaction information should be included in its calculation of the performance indicator it uses to report its results of operations. Indicate w
> Choose the best answer. 1. The AICPA Audit and Accounting Guide Health Care Entities is considered category b authoritative guidance that can be used by which of the following? a. A business-type government hospital. b. A not-for-profit hospital. c. A fo
> Information from the 2012 Form 990 and the 2013 annual report for Feeding America , follows. Although the Form 990 indicates it is for 2012, it is actually for the period July 1, 2012, to June 30, 2013, the same time period as the 2013 annual report. Use
> The Silverton Symphony Orchestra Hall is a well-established not-for-profit organization exempt under IRC Sec. 501(c)(3) that owns a facility that is home to the local symphony orchestra. Its mission is to increase access to the arts for the community of
> The Let’s Read organization is a public charity under IRC Sec. 501(c)(3). It had total support of the following: United Way support………………………………………….$ 10,000 Grant from the state……………………………………………25,000 Grant from the city………………………………………………10,000 Con
> You are a governmental accountant for a large municipality, and you have recently been assigned to the budget office and charged with building a better budget document—one that will be of the highest quality, so that citizens and others with an interest
> The midsize City of Orangeville funds an animal control program intended to minimize the danger stray dogs pose to people and property. The program is under scrutiny because of current budgetary constraints and constituency pressure. An animal control wa
> The City of Ashcroft has produced a Service Efforts and Accomplishments report for the past four years in an attempt to answer the question, “How are we doing?” for its citizens. Reproduced here is an excerpt from the
> The City of Manhattan, Kansas, prepares an annual Budget Book, a comprehensive document that includes a citywide budget, as well as departmental budgets. The city has received the GFOA Distinguished Budget Award for more than 25 years. Following are grap
> The police chief of the Town of Meridian submitted the following budget request for the police department for the forthcoming budget year 2017–18. Upon questioning by the newly appointed town manager, a recent masters graduate with
> Choose the best answer. 1. Budgets of government entities: a. Are integrated with the financial accounting system. b. Enable governments to demonstrate compliance with laws and to communicate performance effectiveness. c. Are adopted by governments after
> The United States Office of Management and Budget (OMB) provides guidance on the allow ability of costs under federal grant agreements in Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Following is a lis
> The City of Greeley, Colorado’s, fire department, prepares annual Performance Measures. Following are excerpts from the 2013 fire department performance report. Required: a. Examine the following performance report. In what areas did t
> Following is the audit report for the City of Prairie View. Citizens of Prairie View: Split Responsibility for Financial Statements We have audited the accompanying financial statements of the City of Prairie View (the City) as of and for the year ended
> Choose the best answer. 1. Under the hierarchy of GAAP for a state and local government, which of the following has the highest level of authority? a. AICPA Practice Bulletins if specifically made applicable to state and local governments by the AICPA (a
> Collier County had the following federal award activity during the most recent fiscal year: Required: a. Based on size, which programs would be considered Type A programs? Type B programs? b. Based on the information provided above, list any low-risk
> You are the finance director of White Rock City. Your current auditor informs you that he is retiring and selling his auditing practice. When you seek his advice regarding the hiring of the accounting firm that is currently helping to integrate a new acc
> Use Illustration 14–3 as a guide in completing this exercise. ______1. Fredericksburg Chamber of Commerce ______2. American Diabetes Association ______3. American Legion ______4. American Museum of Natural History ______5. American Institute of Certified
> Caring Community Hospital, a not-for-profit hospital, recorded the following transactions. 1. Received $20 as co-pay from a patient for an out-patient visit. Billed $500 to insurance. 2. Gift shop sales amounted to $1,500. 3. Citizen’s Health Insurance p
> Gail McCook, the administrative assistant of a local CPA firm, merged the files listing GAAS standards and GAGAS standards. Because the firm performs both GAAS and GAGAS audits, it is important to identify which standards are applicable to which audits.
> Following is a list of a number of accounts used by federal agencies. Required: For each of the accounts listed indicate in Column A whether the account is a proprietary account (P) or a budgetary account (B). In Column B indicate whether the account
> Access the most recent Financial Report of the U.S. Government at the U.S. Treasury Department Web site, www.fms.treas.gov/fr, and answer the following questions. Required: a. What are amounts of the total budget deficit and net operating cost for eac
> The source of authoritative guidance for federal financial accounting and reporting is the Federal Accounting Standards Advisory Board. To better understand the FASAB, access its Web site at www. fasab.gov to answer the following. Required: a. What is t
> In 2013, 22 of 24 CFO Act agencies received unqualified (unmodified) audit opinions. The Comptroller General disclaimed an opinion on one agency, and one agency received a qualified opinion. The one agency receiving a qualified opinion was HUD (Housing a
> The U.S. Department of Health and Human Services maintains the Web site www.hospitalcompare. hhs.gov, which provides an array of measures that report on individual hospitals and other types of health care providers. Access the Web site for help in co
> In 2010, Congress passed and the President signed into law the Patient Protection and Affordability Act. The act provides for sweeping changes to health care and has been extremely controversial. To learn more about this act, go to www.healthcare.gov
> Custer County receives pass-through funds from the state’s Department of Justice to assist in administering the federally funded Public Safety Partnership and Community Policing Grants program (also referred to as Community Oriented Policing Services [CO
> The Internal Revenue Service (IRS) initiated a study of not-for-profit hospitals in 2006. One purpose of the study was to help the IRS better understand the community benefit provided by not-for-profit hospitals. Community benefit is a critical factor in
> Carol Hernandez has recently been appointed director of the foundation for a private university located in the state of Minnesota. She is intent on learning as much as she can about the foundation’s responsibilities concerning the management and investme
> The chief administrator for a group of not-for profit early education centers and outreach facilities has hired you to conduct an audit. A mission of the organization is to provide child care and early education to children in economically distressed are
> Following is the governmental activities pre-closing trial balance for the Town of Freaz. Freaz is a relatively small town and, as a result, it has only governmental funds (i.e., it uses no proprietary funds). There are no component units. To complete th
> A city has approached you concerning the audit of its 2017 financial statements. State law requires the city to have an audit and submit the audited financial report to the state. New elections at the beginning of the fiscal year resulted in a change in
> Illustration 10–4, adapted from Crawford and Associates, lists several ratios under the heading Financial Position. Which of the ratios listed most closely aligns with the GASB research study definition of financial position provided on page 409? Explain
> Lake View Mental Health Affiliates, a nongovernmental not-for-profit organization, has contacted William Wise, CPA, about conducting an annual audit for its first year of operations. The governing board wishes to obtain an audit of the financial statemen
> The city council members of Laurel City are considering establishing an audit committee as a subset of the council. Several members work for commercial businesses that have such committees. They have asked your advice as a partner in the public accountin
> A federal government initiative to rate public colleges and universities has been undertaken by the U.S. Department of Education. Performance measures for K–12 education have been part of the federal funding initiative for many years with such programs a
> One of the responsibilities of an auditor is to determine the appropriate GAAP for the entity being audited. In December, 2013, GASB issued an exposure draft titled “ The Hierarchy of Generally Accepted Accounting Principles for State and Local Governmen
> The City of St. Cloud, Minnesota, annually prepares a trend report using the ICMA’s Financial Trend Monitoring System. The table presented here captures trend information provided by St. Cloud in its 2013 Annual Financial Trend Report.
> In 2010 the city had failed to honor its guarantees on The Harrisburg Authority (THA) debt. (THA is a component unit of the city.) In 2011 Harrisburg filed for bankruptcy; however, the bankruptcy petition was denied by the court. The State of Pennsylvani
> You are a new city council person for the City of Columbia, Missouri. You are aware that several cities have been in the news recently because of the financial crises they have faced. The governing bodies have been criticized for not being aware of the n
> Identify some of the characteristics of a government’s citizens that can affect the government’s financial condition. Explain how the characteristics affect financial condition.
> Examine the following tables from the Financial Trend Monitoring Report for the Town of Oakdale that reports on fiscal year 2017. The performance indicators selected are total revenue and revenue per capita. The town provides three reference groups wi
> Throughout Chapters 2-9 reference has been made to the City and County of Denver’s Comprehensive Annual Financial Report (CAFR). In addition to issuing the CAFR the City and County of Denver issues a Popular Annual Financial Report (PAFR). To complete th
> Write the letters a through o on a sheet of paper. Beside each letter, put a plus ( 1 ) if a high or increasing value of the item is generally associated with stronger financial condition, a minus ( 2) if a high or increasing value of the item is ge
> In its notes to the financial statements t he City of St. Petersburg, Florida provided the following information about the amounts and classifications for the St. Petersburg fund balances. Use the information provided by St. Petersburg to complete thi
> The MD&A for the 2013 City and County of Denver CAFR is included as Appendix B in this chapter. Following are two tables that have been adapted from the statistical section of the CAFR. Use the MD&A and the provided statistical tables to complete
> Following are the operating statements for a public and private college. The operating statements have been adapted from the annual reports of a public and a private university. As would be expected, the reports are somewhat different. Catherine College
> Following are descriptions of several relationships between primary governments and other organizations.* * Information used in this case is adapted from information provided in the GASB Comprehensive Implementation Guide (Norwalk, CT, 2010). Required:
> *In the 2010 CAFR, Detroit indicated that its general obligation debt rating had been downgraded by Moody’s Investors Services from a Ba2 to a Ba3. Based on its fourth quarter Performance Dashboard 1 Detroit was subsequently downgraded
> Electronic Municipal Market Access (EMMA) provides investors and others interested in state and local government debt and financial information an excellent resource. By accessing EMMA an individual is able to learn about what type of debt is outstanding
> What is an IRC Sec. 527 organization? Are these organizations tax-exempt? What filing requirements have been imposed on 527 organizations by campaign finance laws?
> Discuss what, if any, political activity can be undertaken by a charitable NFP organization.
