2. Suppose the county were to prepare government-wide statements and account for propenty ta full accrual basis of accounting rather than the modified accrual basis.How would your entries differ? Explain. xes on EX. 4-4 Grants are not necessarily recognized as revenue when they are awarded Columbus City was awarded program. The following were significant events relating to the grant . The city, which is on a calendar year, was notified of the award in November 2017, a state reimbursement grant of $150,000 to assist its adult literacy During 2018 it expended $30,000 on the literacy program and was reimbursed for $20,000. It expected to receive the balance in January 2019 In 2019 it expended the remaining $120,000 and was reimbursed by the state for the $10?? owing from 2018 and the amount spent in 2019 I. Prepare journal entries to record the events in a governmental fund. Suppose instead that the city received the entire $150,000 in cash at the time the award was announced in 2017. How much revenue should the city recognize in its governmental fund statements in each of the three years? Explain. 2. 3. Suppose alternatively that the state awarded the city an unrestricted grant of $150,000, which the city award was announced in 2017. How much revenue should the city recognize in its govern elected to use to support the adult literacy program. The city received the entire $150,000 in cash at the time the mental fund statements in each of the three years? Explain
1)
Expenditures a/c Dr.
To Cash
30,000
30,000
Grants a/c Dr.
Cash a/c Dr.
To Grants Receivables
10,000
20,000
30,000
Expenditures a/c Dr.
To Cash
120,000
120,000
Cash a/c Dr.
To Grants Received
To Grants Receivables
130,000
120,000
10,000
2) If the city received the entire $150,000 in cash at the time the award was announced in 2017, they would recognize none in 2017, and then $30k, and $120k in respective yearly order. If funds are available they should be recognized.
3) Similar to the question above, as long as they are available for expense, the total $150k should be recognized.
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Journal entries | Date | Particulars | Amount Dr. | Amount Cr. |
| 2017 | No Entry | | |
| 2018 | Expenditures a/c Dr. To Cash | 30,000 | 30,000 |
| Grants a/c Dr. Cash a/c Dr. To Grants Receivables | 10,000 20,000 | 30,000 |
| 2019 | Expenditures a/c Dr. To Cash | 120,000 | 120,000 |
| Cash a/c Dr. To Grants Received To Grants Receivables | 130,000 | 120,000 10,000 |
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