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Generally accepted modified accrual accounting practices pertaining to inventories may not fulfill the objectives of financial reporting. Scenario 2: The following is an excerpt from a note to the financial statements of the city of Dallas (dates changed): The city prepares its annual appropriated general fund, debt service fund, and proprietary operating funds budgets on a basis (budget basis) which differs from generally accepted accounting principles (GAAP basis). The major differences between the budget and GAAP bases are that encumbrances are recorded as the equivalent of expenditures (budget) rather than a commitment of fund balance (GAAP) in the governmental funds. The city accounts for inventories on the purchases basis. One of the city's departments, which is accounted for in the general fund, budgeted $195,000 in supplies expenditures for fiscal 2015. It began the 2015 fiscal year with $30,000 of supplies on hand. It also had $12,000 of supplies on order. During the year it ordered an additional $180,000 of supplies, received (and paid for in cash) $185,000 of supplies, and consumed $178,000 of supplies. Instructions: Prepare all journal entries, consistent with GAAP, including budgetary and encumbrance entries that the department should make in 2015. Indicate the accounts and amounts related to supplies that the city would report on its year-end statement of revenues, expenditures, and changes in fund balance and balance sheet. By how much did the department over- or under-spend its supplies budget (on a budget basis)? Comment on the extent to which the city's statement provides a basis to: Assess the ''true'' economic costs associated with supplies Determine whether the city adhered to budgetary spending mandates Suppose that in the last quarter of the year, department officials realized that the department was about to overspend its supplies budget. They therefore ceased placing new orders for supplies. However, they imposed no restrictions on the use of supplies and thereby allowed the supplies inventory to decline to near zero. What impact would these cost-cutting measures have on supplies expenditures as reported in an actual-to budget comparison (on a budget basis)? What impact would the year-end measures have on reported supplies expenditures (per GAAP)? Would your response be different if the city accounted for supplies on the consumption basis?
how to prepare the reversing entries from the adjusting entries as follows and tranferrer to the ledger ? advertising
a contribution income statement for the la jolla inn is shown below. ignore income
What are the provisions in the Sarbanes-Oxley Act 2002 and the New York Stock Exchange listing requirements that are aimed at improving corporate governance and are directly related to audit committees?
Compute the net realizable value of the accounts receivable of Lucille Company at December 31, 2007.
On March 1, Year 1, a firm issues $475,000 bonds at par value plus accrued interest. The stated rate on the bonds was 12% and the bonds pay interest semi-annually on June 30 and December 31. Prepare the entries necessary to record
Suppose the Quick Towing Company purchases a new tow truck. The old truck had a book value of $1,000 and was sold for $1,420. If Quick Towing is in the 34 percent marginal tax bracket, what is the tax liability on the sale of the truck?
On June 1 capian company borrows $90,000 from first bank on a 6 month $90,000, 12% note. Prepare the entry for june 1; prepare the adjusting entry for june 30; prepare the entry at maturity (december1), assuming monthly adjustment entries have bee..
Texark Inc., a calendar year taxpayer, reported $5,210,300 net income before tax on its financial statements prepared in accordance with GAAP. The corporation's records reveal the following information.
during 2012 fedcom was affected by a strike that caused a disruption in operations and the subsequent suspension of
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Watson Corporation reported net income of $352,000, cash of $67,800, and net cash provided by operating activities of $221,200. What does this suggest about the quality of the company's earnings? What further steps should be taken?
clark company sells 8 bonds having a maturity value of 5000000 for 5421236. the bonds are dated january 1 2014 and
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