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3 years ago

Which of the following is correct with respect to Debt Service Funds?

Business

2 answers:

BigorU [14]3 years ago

7 0

Answer:

C. Debt service funds account for and report financial resources that are restricted, committed or assigned to expenditure for principle and interest for governmental debts except debt of proprietary and fiduciary funds who account for their own interest and principle payments.

Explanation:

Under the Codification of Governmental Accounting and Financial Reporting Standards by the Governmental Accounting Standards Board (GASB); Code 200 states that debt service funds are to be used to service terms and bond reserves, guaranty, warrants, note, capital leases, or sinking funds.

Debt service funds is a cash reserve that is used to account for and report financial resources that are restricted, committed or assigned to expenditure for principle and interest for governmental debts except debt of proprietary and fiduciary funds who account for their own interest and principle payments.

The purpose of using a debt service fund is to reduce the risk of a debt security for investors, thereby making it more attractive and appealing to them. Also, the debt service fund helps to mitigate the effective interest rate needed by the government to sell the offering.

The other types of governmental funds are namely;

- Capital projects funds.

- Permanent funds.

- General funds.

- Special revenue funds.

Verizon [17]3 years ago

5 0

Answer:

Explanation:

Debt service funds are used to pay for principal and interest on certain types of debts. This reduced the risk of debt security that investors face and also reduces the effective rate at which the offering can be sold.

However debt service funds cannot be used for proprietary funds like 400 and 500.

Instead we use Enterprise funds for 400. That is operations similar to corporate enterprise. For example water and sewage utilities.

Internal service funds for 500 used by other funds or departments bin a government in a cost reimbursement basis. For example a food supplier that takes orders and is reimbursed for each order.

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Vulcan Service Co. experienced the following transactions for Year 1, its first year of operations: Provided $82,000 of services

Over [174]

Answer:

Vulcan Service Co.

a. Journal Entries:

Debit Accounts Receivable $82,000

Credit Service Revenue $82,000

To record services rendered on account.

Debit Cash $49,200

Credit Accounts Receivable $49,200

To record cash collected on account.

Debit Salaries Expense $30,000

Credit Cash $30,000

To record salaries expense for the year.

2. Debit Bad Debts Expense $2,456.72

Credit Allowance for Uncollectible $2,456.72

To record bad debts expense.

b. Income Statement for year ended December 31, Year 1:

Service Revenue $82,000

Salaries Expense 30,000

Bad Debts expense 2,456.72 32,456.72

Net income $49,543.28

c. The net realizable value of the accounts receivable at December 31, Year 1 is:

Accounts Receivable = $32,800

less Allowance for

uncollectibles 2,456.72

Net realizable value = $30,343.28

Explanation:

a) Data and Calculations:

Accounts Receivable

Account Titles Debit Credit

Service Revenue $82,000

Cash $49,200

Balance 32,800

Service Revenue

Account Titles Debit Credit

Accounts receivable $82,000

Salaries Expense

Account Titles Debit Credit

Cash $30,000

Bad Debts Expense

Account Titles Debit Credit

Allowance for Collectibles $2,456.72

Allowance for Uncollectibles

Account Titles Debit Credit

Bad Debts expense $2,456.72

Cash Account

Account Titles Debit Credit

Accounts receivable $49,200

Salaries expense $30,000

Balance 19,200

Trial Balance as at Year 1:

Account Titles Debit Credit

Cash $19,200

Accounts Receivable 32,800

Allowance for Uncollectibles $2,456.72

Service Revenue 82,000

Salaries Expense 30,000

Bad Debts expense 2,456.72

Totals $84,456.72 $84,456.72

Accounts receivable aging schedule:

Number of Percent Likely to

Days Past Due Amount Be Uncollectible Allowance Balance

Current $ 24,272 .01 $242.72

0-30 1,640 .05 82.00

31-60 2,296 .10 229.60

61-90 1,968 .30 590.40

Over 90 days 2,624 .50 1,312.00

Total $32,800 $2,456.72

8 0

3 years ago

Dan is responsible for developing the promotional campaign for under armour’s new line of footwear for teens. he will be writing

Norma-Jean [14]

The answer that best fits the blank provided above is the term COMMUNICATION. Since the main responsibility of Dan is to create a promotional campaign for a new line of footwear in Under Armour, he should state this in communication terms in order to target customers' attitudes for a favorable response.

8 0

3 years ago

Investment X offers to pay you $6,200 per year for nine years, whereas Investment Y offers to pay you $9,000 per year for five y

Ira Lisetskai [31]

Answer:

a)Present value [X] = $46,099.06

Present value[Y] = $40,066.40

b) Present value[X] = $30,667.51

Present value[Y] = $30,897.73

Explanation:

Present value of an ordinary annuity is calculated as follows:

$Present value =PMT*\frac{[1-(1+i)^-^n]}{i}$