• Write 500–750 words that addresses the following:
    • When was GASB Statement No. 56 initiated?
    • In your own words, what is the essence of the new ruling?
    • Why did the GASB probably deem it as being necessary?
    • How might GASB Statement No. 56 change the activities of any accountant performing governmental accounting?
  • Create journal entries for all of the following situations.
  1. On 10/1/2010, a for-profit Company A provides $100,000 of service to Company B. Company B plans to pay their bill 90 days later.
    • Create the journal entry when the service is provided.
    • Create the journal entry when the cash is received.
  2. On 12/1/2010, the city’s recreation department receives a government grant of $100,000 specifically to use for next year’s park upgrades, which will begin on 1/1/2011.
    • Create the journal entry made when the cash is received.
    • Create the journal entry to be made on 1/1/2011.
  3. A for-profit retail store buys $200,000 of inventory on 9/1/2010.
    • Create the proper journal entry to show purchase of this inventory.
  4. A local city park buys $200,000 of food merchandise for later resale. It uses the purchase method to account for inventory.
    • Create the proper journal entry for when this purchase is made.
  5. A nonprofit organization receives a $250,000 donation on 12/1/2011, but the donor specifically wants it spent in 2012.
    • Create the journal entry or entries to show the proper recording of revenue (this may require more than on journal entry).
    • Create the subsequent journal entry to show spending of the funds.