Professional Documents
Culture Documents
Part 1 (30%)
The following are transactions for the city of Gloucester.
Required:
Analyze the above transactions by using the accounting equation for a governmental fund.
Part 2 (35%)
1) Distinguish between governmental funds, proprietary funds, and fiduciary funds. Which funds are
classified as governmental funds?
2) What are the simplified and complete accounting equations for a governmental fund?
Part 3 (35%)
Bezos Wealth made three charitable donations in 2014. Each was for $500,000, however they were made
to three different organizations as follows:
1. Bezos donated to a local voluntary health and welfare organization (VHWO), and indicated that the
funds could be used as the VHO wanted.
2. Bezos donated to a local private, not-for-profit university, designating the funds to be used for
scholarships and student aid.
3. Bezos donated to the local not-for-profit, nongovernmental hospital, designating the funds to be used
for purchase of diagnostic equipment.
Required:
For each of the above three situations:
A. Prepare the journal entry that each organization would prepare at the time of the contribution.
B. Prepare the journal entry that each organization would prepare at the time of the subsequent spending
of the funds. Assume that the spending is in accordance with any restrictions that Bezos placed on the
donation.