ACCT 4421 EXAM #3 QUESTIONS
WITH VERIFIED ANSWERS
Scofield City received a donation from the estate of the late Lisa O'Reilly to be used
to support the city's public library. The gift consisted of $200,000 cash and a portfolio
of securities with a market value of $350,000. The securities have a book value of
$250,000. The donor stipulated that the principal of the gift, including investment
gains (realized and unrealized) but excluding investment losses, must be kept intact.
The income must be used to care for and maintain the book collection at the newly
renamed O'Reilly Public Library. All appropriate costs, including investment losses,
may be charged against the revenues yearly to determine the amount available for
the specified purposes. During the year, the city engaged in the following
transactions on behalf of the library.
Accepted the donation.
Received dividends and interest of $18,000.
Purchased securities for $200,000.
Sold securities that were part of th - ANSWER-Dr. Contribution Revenue $550,000
Dr. Gain/revenue (not available to beneficiary) $15,000
Cr. Fund Balance $565,000
Scofield City received a donation from the estate of the late Lisa O'Reilly to be used
to support the city's public library. The gift consisted of $200,000 cash and a portfolio
of securities with a market value of $350,000. The securities have a book value of
$250,000. The donor stipulated that the principal of the gift, including investment
gains (realized and unrealized) but excluding investment losses, must be kept intact.
The income must be used to care for and maintain the book collection at the newly
renamed O'Reilly Public Library. All appropriate costs, including investment losses,
may be charged against the revenues yearly to determine the amount available for
the specified purposes. During the year, the city engaged in the following
transactions on behalf of the library.
Accepted the donation.
Received dividends and interest of $18,000.
Purchased securities for $200,000.
Sold securities that were part of th - ANSWER-Dr. Revenue (available to beneficiary)
$18,000
Cr. Income available to beneficiary $16,000
Cr. Loss (available to beneficiary) $2,000
Scofield City received a donation from the estate of the late Lisa O'Reilly to be used
to support the city's public library. The gift consisted of $200,000 cash and a portfolio
of securities with a market value of $350,000. The securities have a book value of
$250,000. The donor stipulated that the principal of the gift, including investment
gains (realized and unrealized) but excluding investment losses, must be kept intact.
The income must be used to care for and maintain the book collection at the newly
renamed O'Reilly Public Library. All appropriate costs, including investment losses,
may be charged against the revenues yearly to determine the amount available for
the specified purposes. During the year, the city engaged in the following
transactions on behalf of the library.
,Accepted the donation.
Received dividends and interest of $18,000.
Purchased securities for $200,000.
Sold securities that were part of th - ANSWER-Dr. $16,000
Cr. $16,000
Operating; Capital financing; Non capital Financial; Investing
Purchases of investments - ANSWER-investing
Operating; Capital financing; Non capital Financial; Investing
Proceeds from sale of capital assets - ANSWER-capital financing
Operating; Capital financing; Non capital Financial; Investing
Proceeds from sales of investments - ANSWER-investing
Operating; Capital financing; Non capital Financial; Investing
Capital lease payments - ANSWER-Capital financing
Operating; Capital financing; Non capital Financial; Investing
Operating grants received - ANSWER-operating
Operating; Capital financing; Non capital Financial; Investing
Proceeds from line of credit (used for operations) - ANSWER-Non-capital financing
Operating; Capital financing; Non capital Financial; Investing
Capital contribution from airline - ANSWER-Capital financing
Operating; Capital financing; Non capital Financial; Investing
Interest paid on line of credit - ANSWER-Non-capital financing
Bilberry County voted to establish an internal service fund to account for printing and
copying for all its departments and agencies. The county engaged in the following
activities related to the new fund.
The County entered into a capital lease for equipment to be used in printing
activities. The total present value of the lease obligation is $600,000.
Dr. ? $600,000
Cr. ? $600,000 - ANSWER-Dr. Equipment
Cr. Capital lease obligation
Scofield City received a donation from the estate of the late Lisa O'Reilly to be used
to support the city's public library. The gift consisted of $200,000 cash and a portfolio
,of securities with a market value of $350,000. The securities have a book value of
$250,000. The donor stipulated that the principal of the gift, including investment
gains (realized and unrealized) but excluding investment losses, must be kept intact.
The income must be used to care for and maintain the book collection at the newly
renamed O'Reilly Public Library. All appropriate costs, including investment losses,
may be charged against the revenues yearly to determine the amount available for
the specified purposes. During the year, the city engaged in the following
transactions on behalf of the library.
Accepted the donation.
Dr. Cash ?
Dr. Investments?
Cr. Contributions (Revenue) ? - ANSWER-Dr. Cash $200,000
Dr. Investments $350,000
Cr. Contributions (Revenue) $550,000
Scofield City received a donation from the estate of the late Lisa O'Reilly to be used
to support the city's public library. The gift consisted of $200,000 cash and a portfolio
of securities with a market value of $350,000. The securities have a book value of
$250,000. The donor stipulated that the principal of the gift, including investment
gains (realized and unrealized) but excluding investment losses, must be kept intact.
The income must be used to care for and maintain the book collection at the newly
renamed O'Reilly Public Library. All appropriate costs, including investment losses,
may be charged against the revenues yearly to determine the amount available for
the specified purposes. During the year, the city engaged in the following
transactions on behalf of the library.
Received dividends and interest of $18,000
Dr. ? $18,000
Cr. ? $18,000 - ANSWER-Dr. Cash
Cr. Revenue
Scofield City received a donation from the estate of the late Lisa O'Reilly to be used
to support the city's public library. The gift consisted of $200,000 cash and a portfolio
of securities with a market value of $350,000. The securities have a book value of
$250,000. The donor stipulated that the principal of the gift, including investment
gains (realized and unrealized) but excluding investment losses, must be kept intact.
The income must be used to care for and maintain the book collection at the newly
renamed O'Reilly Public Library. All appropriate costs, including investment losses,
may be charged against the revenues yearly to determine the amount available for
the specified purposes. During the year, the city engaged in the following
transactions on behalf of the library.
Purchased securities for $200,000.
Dr. ? $200,000
Cr. ? $200,000 - ANSWER-Dr. Investment
Cr. Cash
, Scofield City received a donation from the estate of the late Lisa O'Reilly to be used
to support the city's public library. The gift consisted of $200,000 cash and a portfolio
of securities with a market value of $350,000. The securities have a book value of
$250,000. The donor stipulated that the principal of the gift, including investment
gains (realized and unrealized) but excluding investment losses, must be kept intact.
The income must be used to care for and maintain the book collection at the newly
renamed O'Reilly Public Library. All appropriate costs, including investment losses,
may be charged against the revenues yearly to determine the amount available for
the specified purposes. During the year, the city engaged in the following
transactions on behalf of the library.
Sold securities that were part of the original gift (market value at date of gift $72,000;
book value in hands of donor $68,000) for $78, - ANSWER-Dr. Cash $78,000
Cr. Gain (not available to the beneficiary) $6,000
Cr. Investment $72,000
Scofield City received a donation from the estate of the late Lisa O'Reilly to be used
to support the city's public library. The gift consisted of $200,000 cash and a portfolio
of securities with a market value of $350,000. The securities have a book value of
$250,000. The donor stipulated that the principal of the gift, including investment
gains (realized and unrealized) but excluding investment losses, must be kept intact.
The income must be used to care for and maintain the book collection at the newly
renamed O'Reilly Public Library. All appropriate costs, including investment losses,
may be charged against the revenues yearly to determine the amount available for
the specified purposes. During the year, the city engaged in the following
transactions on behalf of the library.
Sold some of the securities that were acquired for $53,000. They were acquired at a
price of $55,000.
Dr. Cash ?
Dr. Loss on sale (avail - ANSWER-Dr. Cash $53,000
Dr. Loss on sale (available to beneficiary) $2,000
Cr. Investment $55,000
Bilberry County voted to establish an internal service fund to account for printing and
copying for all its departments and agencies. The county engaged in the following
activities related to the new fund.The County billed the general fund for copying and
printing charges, $70,000.Choose the correct journal entry to record these events in
the internal service fund.
A. Dr. Accounts Payable $70,000
Cr. Revenue $70,000
B. Dr. Accounts Receivable $70,000
Cr. Revenue $70,000
C. Dr. Cash $70,000
Cr. Revenue $70,000
A. No choices are correct - ANSWER-B. Dr. Accounts Receivable $70,000
Cr. Revenue $70,000
WITH VERIFIED ANSWERS
Scofield City received a donation from the estate of the late Lisa O'Reilly to be used
to support the city's public library. The gift consisted of $200,000 cash and a portfolio
of securities with a market value of $350,000. The securities have a book value of
$250,000. The donor stipulated that the principal of the gift, including investment
gains (realized and unrealized) but excluding investment losses, must be kept intact.
The income must be used to care for and maintain the book collection at the newly
renamed O'Reilly Public Library. All appropriate costs, including investment losses,
may be charged against the revenues yearly to determine the amount available for
the specified purposes. During the year, the city engaged in the following
transactions on behalf of the library.
Accepted the donation.
Received dividends and interest of $18,000.
Purchased securities for $200,000.
Sold securities that were part of th - ANSWER-Dr. Contribution Revenue $550,000
Dr. Gain/revenue (not available to beneficiary) $15,000
Cr. Fund Balance $565,000
Scofield City received a donation from the estate of the late Lisa O'Reilly to be used
to support the city's public library. The gift consisted of $200,000 cash and a portfolio
of securities with a market value of $350,000. The securities have a book value of
$250,000. The donor stipulated that the principal of the gift, including investment
gains (realized and unrealized) but excluding investment losses, must be kept intact.
The income must be used to care for and maintain the book collection at the newly
renamed O'Reilly Public Library. All appropriate costs, including investment losses,
may be charged against the revenues yearly to determine the amount available for
the specified purposes. During the year, the city engaged in the following
transactions on behalf of the library.
Accepted the donation.
Received dividends and interest of $18,000.
Purchased securities for $200,000.
Sold securities that were part of th - ANSWER-Dr. Revenue (available to beneficiary)
$18,000
Cr. Income available to beneficiary $16,000
Cr. Loss (available to beneficiary) $2,000
Scofield City received a donation from the estate of the late Lisa O'Reilly to be used
to support the city's public library. The gift consisted of $200,000 cash and a portfolio
of securities with a market value of $350,000. The securities have a book value of
$250,000. The donor stipulated that the principal of the gift, including investment
gains (realized and unrealized) but excluding investment losses, must be kept intact.
The income must be used to care for and maintain the book collection at the newly
renamed O'Reilly Public Library. All appropriate costs, including investment losses,
may be charged against the revenues yearly to determine the amount available for
the specified purposes. During the year, the city engaged in the following
transactions on behalf of the library.
,Accepted the donation.
Received dividends and interest of $18,000.
Purchased securities for $200,000.
Sold securities that were part of th - ANSWER-Dr. $16,000
Cr. $16,000
Operating; Capital financing; Non capital Financial; Investing
Purchases of investments - ANSWER-investing
Operating; Capital financing; Non capital Financial; Investing
Proceeds from sale of capital assets - ANSWER-capital financing
Operating; Capital financing; Non capital Financial; Investing
Proceeds from sales of investments - ANSWER-investing
Operating; Capital financing; Non capital Financial; Investing
Capital lease payments - ANSWER-Capital financing
Operating; Capital financing; Non capital Financial; Investing
Operating grants received - ANSWER-operating
Operating; Capital financing; Non capital Financial; Investing
Proceeds from line of credit (used for operations) - ANSWER-Non-capital financing
Operating; Capital financing; Non capital Financial; Investing
Capital contribution from airline - ANSWER-Capital financing
Operating; Capital financing; Non capital Financial; Investing
Interest paid on line of credit - ANSWER-Non-capital financing
Bilberry County voted to establish an internal service fund to account for printing and
copying for all its departments and agencies. The county engaged in the following
activities related to the new fund.
The County entered into a capital lease for equipment to be used in printing
activities. The total present value of the lease obligation is $600,000.
Dr. ? $600,000
Cr. ? $600,000 - ANSWER-Dr. Equipment
Cr. Capital lease obligation
Scofield City received a donation from the estate of the late Lisa O'Reilly to be used
to support the city's public library. The gift consisted of $200,000 cash and a portfolio
,of securities with a market value of $350,000. The securities have a book value of
$250,000. The donor stipulated that the principal of the gift, including investment
gains (realized and unrealized) but excluding investment losses, must be kept intact.
The income must be used to care for and maintain the book collection at the newly
renamed O'Reilly Public Library. All appropriate costs, including investment losses,
may be charged against the revenues yearly to determine the amount available for
the specified purposes. During the year, the city engaged in the following
transactions on behalf of the library.
Accepted the donation.
Dr. Cash ?
Dr. Investments?
Cr. Contributions (Revenue) ? - ANSWER-Dr. Cash $200,000
Dr. Investments $350,000
Cr. Contributions (Revenue) $550,000
Scofield City received a donation from the estate of the late Lisa O'Reilly to be used
to support the city's public library. The gift consisted of $200,000 cash and a portfolio
of securities with a market value of $350,000. The securities have a book value of
$250,000. The donor stipulated that the principal of the gift, including investment
gains (realized and unrealized) but excluding investment losses, must be kept intact.
The income must be used to care for and maintain the book collection at the newly
renamed O'Reilly Public Library. All appropriate costs, including investment losses,
may be charged against the revenues yearly to determine the amount available for
the specified purposes. During the year, the city engaged in the following
transactions on behalf of the library.
Received dividends and interest of $18,000
Dr. ? $18,000
Cr. ? $18,000 - ANSWER-Dr. Cash
Cr. Revenue
Scofield City received a donation from the estate of the late Lisa O'Reilly to be used
to support the city's public library. The gift consisted of $200,000 cash and a portfolio
of securities with a market value of $350,000. The securities have a book value of
$250,000. The donor stipulated that the principal of the gift, including investment
gains (realized and unrealized) but excluding investment losses, must be kept intact.
The income must be used to care for and maintain the book collection at the newly
renamed O'Reilly Public Library. All appropriate costs, including investment losses,
may be charged against the revenues yearly to determine the amount available for
the specified purposes. During the year, the city engaged in the following
transactions on behalf of the library.
Purchased securities for $200,000.
Dr. ? $200,000
Cr. ? $200,000 - ANSWER-Dr. Investment
Cr. Cash
, Scofield City received a donation from the estate of the late Lisa O'Reilly to be used
to support the city's public library. The gift consisted of $200,000 cash and a portfolio
of securities with a market value of $350,000. The securities have a book value of
$250,000. The donor stipulated that the principal of the gift, including investment
gains (realized and unrealized) but excluding investment losses, must be kept intact.
The income must be used to care for and maintain the book collection at the newly
renamed O'Reilly Public Library. All appropriate costs, including investment losses,
may be charged against the revenues yearly to determine the amount available for
the specified purposes. During the year, the city engaged in the following
transactions on behalf of the library.
Sold securities that were part of the original gift (market value at date of gift $72,000;
book value in hands of donor $68,000) for $78, - ANSWER-Dr. Cash $78,000
Cr. Gain (not available to the beneficiary) $6,000
Cr. Investment $72,000
Scofield City received a donation from the estate of the late Lisa O'Reilly to be used
to support the city's public library. The gift consisted of $200,000 cash and a portfolio
of securities with a market value of $350,000. The securities have a book value of
$250,000. The donor stipulated that the principal of the gift, including investment
gains (realized and unrealized) but excluding investment losses, must be kept intact.
The income must be used to care for and maintain the book collection at the newly
renamed O'Reilly Public Library. All appropriate costs, including investment losses,
may be charged against the revenues yearly to determine the amount available for
the specified purposes. During the year, the city engaged in the following
transactions on behalf of the library.
Sold some of the securities that were acquired for $53,000. They were acquired at a
price of $55,000.
Dr. Cash ?
Dr. Loss on sale (avail - ANSWER-Dr. Cash $53,000
Dr. Loss on sale (available to beneficiary) $2,000
Cr. Investment $55,000
Bilberry County voted to establish an internal service fund to account for printing and
copying for all its departments and agencies. The county engaged in the following
activities related to the new fund.The County billed the general fund for copying and
printing charges, $70,000.Choose the correct journal entry to record these events in
the internal service fund.
A. Dr. Accounts Payable $70,000
Cr. Revenue $70,000
B. Dr. Accounts Receivable $70,000
Cr. Revenue $70,000
C. Dr. Cash $70,000
Cr. Revenue $70,000
A. No choices are correct - ANSWER-B. Dr. Accounts Receivable $70,000
Cr. Revenue $70,000
