Reference no: EM131704092

Question: (Expenditure/expense accruals) A city was incorporated as of January 1, 2013. It is preparing its first set of financial statements as of December 31, 2013, and is examining transactions and events affecting its General Fund to see if any accruals need to be made. Based on the following data, prepare journal entries to record

(a) accruals needed to prepare the city's fund financial statements and

(b) the additional accruals needed to prepare the city's government-wide financial statements.

1. Salaries for the period ended December 31, 2013, and totaling $25,000 will be paid on January 6, 2014.

2. The city permits its employees to receive cash for unused accumulated vacation pay when they retire or are terminated. Employees who were terminated as of December 31, 2013, will receive $3,000 in cash on January 6, 2014, for accumulated vacation pay. The active employees accumulated vacation pay totaling $14,000.

3. Newly hired sanitation employees accidentally sideswiped several vehicles. The vehicle owners filed claims. The city settled one claim for $2,000 in December and will pay it on January 10, 2014. The city attorney thinks the other claim will cost the city at least $10,000, but there is no indication when it will be resolved.

4. The city adopted a pension plan for its employees. Based on GASB accounting standards, the city actuary calculated the annual required contribution (ARC) for 2013 to be $18,000. However, the city made no appropriation for that purpose.