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this is my final paper and should be in a business memo format. Attached is the instruction. I want the two questions to be not more than 3 pages single space.

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Instructions:
This individual writing assignment requires responding to two independent questions in the form of a business memorandum.
· Responding to both questions (all parts) is mandatory.
· Each memo should be a maximum of two pages, single-spaced, Times New Roman, 12 points, 1 inch margin. Submitting as a Microsoft Word file is strongly prefe
ed.
· You may consult whatever reference materials you like; but you must work independently.
· Should you use generative AI, such as ChatGPT, please clearly indicate this in your memo (just like you would do with any other resource used for the analysis). Failure to do so will be treated as plagiarism.
Question 1
Upon graduating from the Accounting Program at your College, you are hired by the administrative office of the township of Placid Lake, NY. The township has a new mayor who enjoys stating they are “not good with numbers.” The new mayor, however, appreciates the importance of understanding the town’s financial position – among others, they have made a lot of expensive promises while campaigning and would like to understand how they can honor them.
The mayor has been given four statements – the government-wide statement of net assets, the government-wide statement of activities, the balance sheet for the General Fund, and the statement of revenues, expenditures, and changes in the fund balances of the General Fund. They request your help with the following:
1. The mayor has noticed that sometimes the expenses on one statement equal the expenditures on another. What is the difference between expenses and expenditures in the provided statements and why do they (only) sometimes equal each other?
2. The mayor also has noticed that assets minus liabilities equals net assets on one statement, but assets minus liabilities equals the fund balance on another. How can this be? Shouldn’t they be the same? What is the difference between the two? Please explain.
3. The total fund balance seems to have increased in the past year, but total net assets decreased. How could this happen?
4. The mayor decides they don’t want to look at all four statements and want to know which one they should look at to figure out how much they can spend on their campaign promises. What is your recommendation and why?
Note: The mayor has never taken an accounting course and does not understand journal entries, so please do not include any in your memo
Question 2
You are attending an exhibit of an up-and-coming artist. Upon hearing you have recently graduated from the Accounting Program at your College; the host approaches you with a question on art donations. In particular, the host relates that the artist is considering donating some of their work but has heard from friends that sometimes art donated to private not-for-profits is not reported as an asset. The artist, thus, is concerned that if they donate to their favorite private not-for profit, their donation would be meaningless. As an alternative, the artist is considering donating artwork to the local government for display in the town li
ary.
The host retains you for a consulting assignment. Specifically, they request a business memo addressing the following questions:
1. How do private not-for-profits account for donated artwork?
2. How do governmental organizations account for donated artwork (please distinguish between the treatment in the government-wide financial statements versus the governmental fund statements)?
3. Based on your research, should the artist donate to their favorite not-for-profit or to the local government (in either case, the artist will require that the donated artwork be kept by the recipient rather than sold)?
The host clarifies neither they, nor the artist have any training in accounting, so the memo should not include “stuff like journal entries.”

Instructions:
This individual writing assignment requires responding to two independent questions in the form of a business memorandum.
· Responding to both questions (all parts) is mandatory.
· Each memo should be a maximum of two pages, single-spaced, Times New Roman, 12 points, 1 inch margin. Submitting as a Microsoft Word file is strongly prefe
ed.
· You may consult whatever reference materials you like; but you must work independently.
· Should you use generative AI, such as ChatGPT, please clearly indicate this in your memo (just like you would do with any other resource used for the analysis). Failure to do so will be treated as plagiarism.
Question 1
Upon graduating from the Accounting Program at your College, you are hired by the administrative office of the township of Placid Lake, NY. The township has a new mayor who enjoys stating they are “not good with numbers.” The new mayor, however, appreciates the importance of understanding the town’s financial position – among others, they have made a lot of expensive promises while campaigning and would like to understand how they can honor them.
The mayor has been given four statements – the government-wide statement of net assets, the government-wide statement of activities, the balance sheet for the General Fund, and the statement of revenues, expenditures, and changes in the fund balances of the General Fund. They request your help with the following:
1. The mayor has noticed that sometimes the expenses on one statement equal the expenditures on another. What is the difference between expenses and expenditures in the provided statements and why do they (only) sometimes equal each other?
2. The mayor also has noticed that assets minus liabilities equals net assets on one statement, but assets minus liabilities equals the fund balance on another. How can this be? Shouldn’t they be the same? What is the difference between the two? Please explain.
3. The total fund balance seems to have increased in the past year, but total net assets decreased. How could this happen?
4. The mayor decides they don’t want to look at all four statements and want to know which one they should look at to figure out how much they can spend on their campaign promises. What is your recommendation and why?
Note: The mayor has never taken an accounting course and does not understand journal entries, so please do not include any in your memo
Question 2
You are attending an exhibit of an up-and-coming artist. Upon hearing you have recently graduated from the Accounting Program at your College; the host approaches you with a question on art donations. In particular, the host relates that the artist is considering donating some of their work but has heard from friends that sometimes art donated to private not-for-profits is not reported as an asset. The artist, thus, is concerned that if they donate to their favorite private not-for profit, their donation would be meaningless. As an alternative, the artist is considering donating artwork to the local government for display in the town li
ary.
The host retains you for a consulting assignment. Specifically, they request a business memo addressing the following questions:
1. How do private not-for-profits account for donated artwork?
2. How do governmental organizations account for donated artwork (please distinguish between the treatment in the government-wide financial statements versus the governmental fund statements)?
3. Based on your research, should the artist donate to their favorite not-for-profit or to the local government (in either case, the artist will require that the donated artwork be kept by the recipient rather than sold)?
The host clarifies neither they, nor the artist have any training in accounting, so the memo should not include “stuff like journal entries.”
Answered 1 days After May 12, 2024

Solution

Prince answered on May 14 2024
5 Votes
Memorandum 1
TO: The Mayor of Placid Lake, NY
FROM: Massao
DATE: 13th May 2024
SUBJECT: Understanding the Township's Financial Statements
1. The difference between expenses and expenditures stems from the basis of accounting used in preparing the different financial statements.
The Statements contain expenses, specifically the Statement of Net Assets and the Statement of Activities. These two statements use the full accrual basis of accounting which is consistent with private business accounting. In the full accrual basis, expenses are recorded when the blame falls or the related liability is incu
ed, rather than when cash is paid. As a result, expenses may be recognized even if revenue is unearned or if they are paid. A common example is salary expenses, which is entered when employees do work, not when they are paid.
At the same time, on the governmental fund statements and equity are recorded expenditures, Balance Sheet for the general and the Statement of revenues, expenditures, and changes in fund balances. This is refe
ed to the modified accrual basis of accounting, and on this basis, expenditures are normally recognized when the liability is incu
ed. This is “generally opportune if it is to be paid from cu
ently available resources”. This means, that for example, the expenditure for supplies is recorded when these were actually received and the liability was incu
ed (Granof, 2004).
2. The difference arises from the different bases of accounting and the scope of each set of statements.
Net assets in the Statement of Net-Assets is the amount left of all the assets after deducting all the liabilities, which include NCA and LTL. It is reflective of the overall economic resources of the government entity. However, fund balance in the governmental Fund Balance Sheet is the amount left of only cu
ent assets after deducting only cu
ent liabilities. It does not include NCA and LTL, but rather it only focuses on the available cu
ent financial resources (Freeman et al., 2014)
The distinction in scope is because of the different purposes of the statements. The statements are supposed to present a comprehensive view of the government’s general financial position and results of its operations, much like those of private-sector businesses JHBK11. While the fund statements are intended to show the short-term financial resources presently available for utilizing over the next few years, which is important for planning and liquidity reasons.
3. It is possible for the total fund balance to increase while the total net assets decrease due to the different bases of...
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