Grants are not necessarily recognized as revenue when they are awarded. Columbus City was awarded a state reimbursement grant of $150,000 to assist its adult literacy program. The following were significant events relating to the grant:

a. The city, which is on a calendar year, was notified of the award in November 2012.

b. During 2013 it expended $30,000 on the literacy program and was reimbursed for $20,000. It expected to receive the balance in January 2014.

c. In 2014 it expended the remaining $120,000 and was reimbursed by the state for the $10,000 owing from 2013 and the amount spent in 2014.

1. Prepare journal entries to record the events in a governmental fund.

2. Suppose instead that the city received the entire $150,000 in cash at the time the award was announced in 2012. How much revenue should the city recognize in its governmental fund statements in each of the three years? Explain.

3. Suppose that, instead of a reimbursement grant, the state awarded the city an unrestricted grant of $150,000, which the city elected to use to support the adult literacy program. The city received the entire $150,000 in cash at the time the award was announced in 2012. How much revenue should the city recognize in its governmental fund statements in each of the three years? Explain.

4. Assume the same facts as for questions 1, 2, and 3. How much revenue should the city recognize in its government-wide statements for each of the three years? Explain.