Faculty of Theater from Cluj-Napoca had equipped a laboratory for the private use of teachers (in 2003) with 1 DVD player (1000 lei). In January 2020, the faculty decided to modernize the laboratory with a laptop (5,000 lei) and a collection of DVDs with opera songs (4,000 lei). All purchased fixed assets were paid from budgetary sources. The depreciation period for assets was generally set at a period of 5 years and recorded annually. In January 2021, a fire took place in the faculty. As a result, just some spare parts (in amount of 200 lei) could be recovered from the laptop, and were sold with the same amount. The expenses related to the dismantling service provider were of 50 lei. After an investigation, the management decided that the building administrator was culpable for the fire and decided to charge him the amount of 1,000 lei from its future wage for the damages caused.

Attention! If the chosen answer is 'none' the amount must be filled in with the number zero.

 Purchase of laptop and related expenses:

 Purchase of the collection of DVDs with opera songs:

 Payment from budgetary sources:

 Evidence discharge of the DVD player:

 Evidence discharge of the collection of DVDs with opera songs:

 Evidence discharge of the laptop:

 Recovery of spare parts from dismantling:

 Sale of spare parts:

 Evidence discharge of the spare parts:

 Expenses with dismantling services:

 Imputation of the building administrator:

A Month in the Life of a Faculty from cash vs. accrual accounting perspective

The Faculty provides web design services to a number of clients and has been using the cash basis of accounting. It used a spread-sheet to keep up with the business's cash receipts and payments. Total cash on hand increased by $15732.70 (from $7911.12 to $23643.82) during the month.

The following additional information is gathered in the process of preparing the accrual-based income statement:

Revenues:

-    The $9000 deposit on April 7 was an advance payment for work to be performed equally during April, May, and June.

-    The $11788.45 deposit on April 20 was collection of an account for which the work was performed during January and February.

-    During April, services valued at $2000 were performed and billed, but not yet collected.

Expenses:

-    Payroll -- The $700 payment on April 3 related $650 to the prior month. An additional $350 is accrued by the end of April, but not paid.

-    Rent -- The amount paid corresponded to the amount used.

-    Server -- The $1416.22 payment on April 15 related $500 to prior month's usage.

-    Administrative -- An additional $600 is accrued by the end of April, but not paid.

Fill in the boxes to prepare the cash-basis and accrual-basis income statement (IS), by using the information from the spread-sheet and the additional information provided.

 NOTE! All numbers should be fill in using 2 decimals (ex. 300.00)

A Week in the Life of a Small Government from cash vs. accrual accounting perspective

Fill in the below boxes by analysing the effects of the transactions on the financial statements: Cash Flow Statement (CFS), Operating Statement (OS) and Balance Sheet (BS).

Important !!!  If you get negative amount, fill in the boxes without the "-" sign !!!

Openings values are: Bank 50; Receivables 20; Fixed assets 700; Depreciation 0; Borrowings 500.

Transactions encountered during the period are:

a)    Corporate taxpayers are required to make tax payments of $100 million to the government, but only $90 million is received. At the end of the week, $10 million is outstanding. The effects on the financial statement are:

CFS:

OS:

BS:

b)   The government sells fixed assets for $100 million. The assets had been valued at $100 million. $100 million is received. The effects on the financial statement are:

CFS:

OS:

BS:

c)    Government salary payments are made during the week. In addition to paying employees $60 million, the government is obligated to provide for their pensions when they retire—employees earned $30 million in future pension rights during the period. The effects on the financial statement are:

CFS:

OS:

BS:

d)   The government settles a long-running legal dispute. It agrees to pay $30 million to the plaintiff in 2 months’ time. The effects on the financial statement are:

CFS:

OS:

BS:

e)    All the government’s borrowings are held in foreign exchange. The exchange rate declined by 2% during the week $10 million. The effects on the financial statement are:

CFS:

OS:

BS:

Financial statements reveal the effects after all the transactions as follows:

Cash accounting (CFS Bank balance) reports a

Accrual accounting (OS) shows a

Accrual accounting (BS) exhibits closing Net Assets of