To make sure you are up to date on the special guidelines the GASB has declared,...
To make sure you are up to date on the special guidelines the GASB has declared, your manager asked you to research GASB Statement No. 56. He also asked you to show him, side by side, how government accounting journal entries might differ from for-profit journal entries in these similar events.
Create journal entries for all of the following situations.
- On 10/1/2010, a for-profit Company A provides $100,000 of
service to Company B. Company B plans to pay their bill 90 days
later.
- Create the journal entry when the service is provided.
- Create the journal entry when the cash is received.
- On 12/1/2010, the city's recreation department receives a
government grant of $100,000 specifically to use for next year's
park upgrades, which will begin on 1/1/2011.
- Create the journal entry made when the cash is received.
- Create the journal entry to be made on 1/1/2011.
Homework Answers
The Governmental Accounting Standards Board (GASB) issued the statement No. 56 in 2009 on April 16
The statement No.56 incorporates accounting and financial reporting guidance that previously only contained in AICPA.
journal entries for all of the following situations.
1. On 10/1/2010, a for-profit Company A provides $100,000 of service to Company B. Company B plans to pay their bill 90 days later.
*all amount are in $
| Date |
Particulars |
Debit |
Credit |
|
Journal entry when the service is provided: |
|||
| 10/1/2010 |
Account Receivables |
1,00,000 |
|
|
To Service revenue |
1,00,000 |
||
|
(Being services provided by Company A to Company B) |
|||
|
Journal entry when the cash is received: |
|||
| 10/4/2010 |
Cash |
1,00,000 |
|
|
To Account Receivables |
1,00,000 |
||
| (Being cash received by Company B) |
2. On 12/1/2010, the city's recreation department receives a government grant of $100,000 specifically to use for next year's park upgrades, which will begin on 1/1/2011.
*all amount are in $
| Date |
Particulars |
Debit |
Credit |
|
Journal entry when the cash is received: |
|||
| 12/1/2010 |
Cash |
1,00,000 |
|
|
To deferred revenue |
1,00,000 |
||
|
(Being government grant received ) |
|||
|
Journal entry to be made on 1/1/2011. |
|||
| 1/1/2011 |
Deferred Revenue |
1,00,000 |
|
|
To Revenue Grants |
1,00,000 |
||
| (Being government grant recognised) |
Add Answer to:
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are given below.
1.
Revenue from the sale of licenses and permits for the first two
months totaled $18,000.
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Land that had been donated previously was sold for
$100,000.
3.
An order was placed for the purchase of a new fire engine at a
price of $142,000.
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Bonds with a face value of $473,000 were issued at par value to
finance...
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