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.
·
Write 500–750 words that
addresses the following:
o
When was GASB Statement
No. 56 initiated?
o
In your own words, what
is the essence of the new ruling?
o
Why did the GASB
probably deem it as being necessary?
o
How might GASB Statement
No. 56 change the activities of any accountant performing governmental
accounting?
·
Create 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.
§ Create the journal entry when the service is provided.
§ Create the journal entry when the cash is received.
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.
§ Create the journal entry made when the cash is received.
§ Create the journal entry to be made on 1/1/2011.
3.
A for-profit retail
store buys $200,000 of inventory on 9/1/2010.
§ Create the proper journal entry to show purchase of this
inventory.
4.
A local city park buys
$200,000 of food merchandise for later resale. It uses the purchase method to
account for inventory.
§ Create the proper journal entry for when this purchase is
made.
5.
A nonprofit organization
receives a $250,000 donation on 12/1/2011, but the donor specifically wants it
spent in 2012.
§ Create the journal entry or entries to show the proper
recording of revenue (this may require more than on journal entry).
§ Create the subsequent journal entry to show spending of
the funds.
