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The City of Katerah maintains its books and records in a manner that facilitates the preparation of the fund financial statements. The city has adopted the 60-day rule for all revenue recognition for which it is appropriate. Prepare all necessary journal entries to record the City’s revenues for the year ended December 31, 2007, arising from the following events:
a. On January 15, the City received notification that it was the recipient of a $200,000 federal grant to assist in the operation of its “Meals on Wheels” program. The federal government expects to send the cash in about three months. This is not a reimbursement-type grant, and all eligibility requirements have been met.
b. In February the City spent $21,000 on “Meals on Wheels.”
c. In April, the City received the $200,000 from the federal government.
is this an exam question?