Exam 8: Government-Wide Statements, Capital Assets, Long-Term Debt

Which of the following are government-wide statements?

A government reported another financing source in the amount of $500,000 related to the sale of land in its governmental funds Statement of Revenues, Expenditures and Changes in Fund Balances. The land had a cost of $100,000. The adjustment in the reconciliation when moving from the changes in fund balances in the Statement of Revenues, Expenditures and Changes in Fund Balances to the change in net assets in the Statement of Activities would be:

The City of Henderson reported a change in fund balances of $1,001,000 in its governmental funds Statement of Revenues, Expenditures and Changes in Fund Balances for the year ended December 31, 2009. In addition, the following information is relevant: A. Capital outlay expenditures amounted to $6,500,000 in the modified accrual statement. General government fixed assets amounted to $90,000,000, excluding land and had an average life of 20 years. B. The modified accrual statement reported proceeds from the sale of land in the amount of $500,000. The land had a basis of $375,000. C. Property taxes had been levied in the amount of $10,000,000. It was estimated that 3% would never be collected, that $500,000 would be collected within 60 days of year-end and that $200,000 would be collected more than 60 days from year-end. The City had recognized the maximum permitted under modified accrual accounting. D. $185,000 of property taxes had been deferred at the end of the previous year and was recognized under modified accrual as revenue in the current year. E. The modified accrual statement reflected debt service expenditures in the amount of $500,000 for interest and $800,000 for principal. No adjustment was necessary for interest accruals at year-end. F. Compensated absences charges, on the full accrual basis, amounted to $60,000 more than under the modified accrual basis. Required: Prepare a reconciliation from the change in fund balances reported above to the change in net assets in the governmental column in the government-wide Statement of Activities for the year ended December 31, 2009.

Fixed assets are not recorded on the governmental fund balance sheets but must be shown on the government-wide financial statements.

When converting fund financial records to government-wide financial statements, worksheet entries are made to eliminate all of the following accounts expect:

________ to be incorporated in the government-wide statements.

When converting from the enterprise funds Statement of Net Assets to the government-wide Statement of Net Assets (government-wide statements), it is necessary to add fixed assets and to deduct long-term debt.

Worksheet entries are never booked; they are only used on the worksheets.

On April 1, 2009, a local government issued bonds in the amount of $2,000,000. The bonds were issued at par and carried an interest rate of 6%, payable October 1 and April 1. When moving from the change in fund balances in the governmental funds Statement of Revenues, Expenditures and Changes in Fund Balances to the change in net Assets in the governmental funds column of the Statement of Activities, both for the fiscal year ended June 30, 2009, the effect for the interest accrual only would be:

The City of Franklin, a general purpose government, reported fund balances in the amount of $24,100,000 in the governmental funds balance sheet dated December 31, 2009. In addition, the following information is relevant: A. General government fixed assets amounted to $35,000,000. Accumulated depreciation of those fixed assets amounted to $18,000,000. B. General long-term liabilities of the government amounted to $ 6,000,000. C. Property taxes, which should be recognized as receivables in the government-wide statements, amounted to $3,000,000. Property taxes recognized as receivables in the governmental funds balance sheet amounted to $2,000,000; the remainder had been deferred, in accord with modified accrual accounting D. Internal service funds net assets amounted to $5,000,000. These were reported in the proprietary funds balance sheet. E. Liabilities, in addition to the amount reported in the governmental funds balance sheet included: (1) accrued interest payable, $300,000; (2) compensated absences payable, $4,500,000. Required: Prepare a reconciliation from the fund balances recognized in the governmental funds balance sheet to the net assets recognized in the governmental funds column of the government-wide statement of net assets.

The difference between assets and liabilities in the government-wide statements is called net equity.

Governments must capitalize infrastructure assets with the inception of GASB Statement 34.

The reconciliation(s) that are required to be presented on the face of the governmental fund financial statements or in separate schedule immediately after the fund financial statements include:

The following information is available for the preparation of the government-wide financial statements for the City of Fishersville for the year ended June 30, 2009: Expenses: General government \ 11,000,000 Public safety 22,000,000 Public works 12,000,000 Health and sanitation 6,000,000 Culture and recreation 4,500,000 Interest on long-term debt, governmental type 600,000 Water and sewer system 12,000,000 Parking system 500,000 Revenues: Charges for services, general government 2,000,000 Charges for services, public safety 200,000 Operating grant, public safety 700,000 Operating grant, health and sanitation 1,400,000 Charges for services, culture and recreation 2,000,000 Charges for services, water and sewer 13,000,000 Charges for services, parking system 400,000 Property taxes 30,000,000 Sales taxes 21,000,000 Investment earnings, business-type 300,000 Other Financing Sources (Uses): Special item-gain on sale of unused land, governmental type 1,000,000 Transfers In (from governmental funds) 1,700,000 Transfer Out (to governmental funds) (1,000,000) Net assets, July 1, 2008, governmental activities 13,000,000 Net assets, July 1, 2008, business-type activities 22,000,000 Required: From the information given above, prepare, in good form, a Statement of Activities for the City of Fishersville for the year ended June 30, 2009. Fishersville has no component units.

What amount of property tax revenue would be reported in its General Fund Statement of Revenues, Expenditures and Changes in Fund Balances for the year ended December 31, 2009? (ignore the effect of collection of any taxes levied prior to 2009)

The difference between the amount of debt limit calculated as prescribed by law and the net amount of outstanding indebtedness subject to limitation is known as:

The following balances exist at year end within the governmental activities of a government unit: Transfers In: 100,000 Transfers Out: 80,000 When compiling the government-wide financial statements, the journal entry to eliminate the transfer activity will include:

Few adjustments to internal service funds are necessary when converting from proprietary funds statements to the government-wide statements as internal service funds are generally reported as business-type activities in the government-wide statements.

What amount would be reported in the government-wide Statement of Activities for the year ended December 31, 2009? (ignore the effect of collection of any taxes levied prior to 2009)

Debt limit is the amount of funds legally required to be set aside to pay outstanding debt.