For each of the following indicate whether the statement is

For each of the following, indicate whether the statement is true or false and include a brief
explanation for your answer. a. A pension trust fund appears in the government-wide financial
statements but not in the fund financial statements. b. Permanent funds are included as one of
the governmental funds. c. A fire department placed orders of $20,000 for equipment. The
equipment is received but at a cost of $20,800. In compliance with requirements for fund
financial statements, an encumbrance of $20,000 was recorded when the order was placed,
and an expenditure of $20,800 was recorded when the order was received. d. The government
reported a landfill as an enterprise fund. At the end of Year 1, the government estimated that
the landfill will cost $800,000 to clean up when it is eventually full. Currently, it is 12 percent
filled. At the end of Year 2, the estimation was changed to $860,000 when it was 20 percent
filled. No payments are due for several years. Fund financial statements for Year 2 should
report a $76,000 expense. e. A city reports a landfill in the general fund. At the end of Year 1,
the government anticipated the landfill would cost $900,000 to clean up when it is full and
reported that it was 11 percent filled. At the end of Year 2, the estimates were changed to
$850,000 and 20 percent filled. No payments are due for several years. Government-wide
financial statements for Year 2 should report a $71,000 expense. f. A lease for a computer (that
has a 6-year life) is signed on January 1, Year 1, with six annual payments of $10,000. The
police department will use the computer. The first payment is to be made immediately. The
present value of the $60,000 in cash flows is $39,000 based on a 10 percent rate. Fund
financial statements for Year 1 should report total expenditures of $10,000. g. An agency fund
has neither revenues nor expenditures but reports expenses. h. A lease for a computer (that
has a 6-year life) is signed on January 1, Year 1, with six annual payments of $10,000. The
computer is to be used by the police department. The first payment is to be made immediately.
The present value of the $60,000 in cash flows is $39,000 based on a 10 percent rate.
Government-wide financial statements for Year 1 should report expenses of $9,400.View
Solution: For each of the following indicate whether the statement is
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