Evergreen County acts as the disbursing agent for a state

#6808
Evergreen County acts as the disbursing agent for a state grant for the performing arts. The
state is responsible for determining which local governments are eligible for the grant money
and for following up to ensure that the recipients comply with the requirements of the grant. The
county receives the grant funds and disburses them according to the schedule provided by the
state. When the county was asked to participate, the county's attorney was concerned that the
county might be held responsible for any disallowed costs. The state agreed to accept
responsibility for any disallowed costs, so the county decided to act as the agent for the state for
this grant.The schedule for the grant funds for 2017 is shown below.City of
Boulder............................... $2,100,000Aspen Township.............................. 1,400,000Snow
ton........................................ 900,000Fir tree Village.................................
600,000Total............................................ $5,000,000Requireda. Prepare the general journal
entries necessary to record Evergreen County's receipt of the money on December 31, 2017
(the end of its fiscal year) and disbursement of the grant funds on January 2, 2018.b. Prepare
the general journal entries required to record Aspen Township's receipt of the funds; assume
that funds are to be used to construct a new performing arts center and all time and eligibility
requirements have been met.c. Since the county received the funds prior to its fiscal year-end,
but didn't disburse them until after its fiscal year-end, how would the activities related to the
grant be reported in the county's financial statements?View Solution:
Evergreen County acts as the disbursing agent for a state

ANSWER
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