Details: To ensure you are up to date on special guidelines the GASB has declared, your manager asked you to research GASB Statement No. 56. He also asked you to demonstrate him, side by side, how government accounting journal entries may differ from for-profit journal entries in these similar events.
prepare 500–750 words which addresses the following:
• When was GASB Statement No. 56 initiated?
• In your own words, what is the essence of the new ruling?
• Why did GASB probably deem it as being essential?
• How may GASB Statement No. 56 change activities of any accountant performing governmental accounting?
Prepare 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.
• Prepare the journal entry when service is provided.
• Prepare the journal entry when 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.
• Prepare the journal entry made when cash is received.
• Prepare 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.
• Prepare 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.
• Prepare the proper journal entry for when this purchase is made.
5) A non-profit organization receives the $250,000 donation on 12/1/2011, but donor specifically wants it spent in 2012.
• Prepare the journal entry or entries to show proper recording of revenue (this might require more than on journal entry).
• Prepare subsequent journal entry to show spending of the funds
Objective:
• Understand accounting and reporting requirements for governmental entities
• Identify specific transactions related to governmental entities
• Improve research, oral and written communication skills and reinforce ethical and professional business conduct