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

What conditions must be satisfied in order to use the modified approach for recording infrastructure?

When converting from fund basis reporting to government-wide reporting, which of the following would require an adjustment?

Assume a government reported $300,000 in capital outlay expenditures in the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances. Secondly, assume current year depreciation of capital assets amounted to $250,000, in the governmental activities column in the Statement of Activities. Those adjustments would cause a decrease of $50,000 when preparing the reconciliation between the change in governmental fund balances to the change in net position of governmental activities in the Statement of Activities.

The City of Charlotte reported property tax revenues in 2017 in the amount of $10 million. The deferred inflow - property taxes reported in the General Fund's balance sheet was $ 300,000 on December 31, 2016 and was $ 375,000 on December 31, 2017. During 2017, $9,000,000 was collected. What amount should the city report for Property Tax Revenue in its year ended December 31, 2017 government-wide Statement of Activities?

When preparing adjusting entries for the government-wide statements, the accounts are adjusted at year end and reversed at the beginning of the next year.

Which of the following is not true regarding infrastructure assets?

GASB requires that "collections" be capitalized and depreciated.

GASB standards require a reconciliation from fund financial statements to government-wide financial statements.

When preparing government-wide statements, enterprise funds must be adjusted to reflect accrual basis.

Which of the following statements is not correct?

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.

A governmental fund's Statement of Revenues, Expenditures, and Changes in Fund Balances reported expenditures of $40 million, including capital outlay expenditures of $12 million. Capital assets for that government cost $80 million, including land in the amount of $10 million. Depreciable assets are amortized over 10 years, on average. The reconciliation from governmental fund changes in fund balances to governmental activities change in Net Position would reflect aan):

With respect to the government-wide statements, list the required statements.

When preparing government-wide financial statements, the modified accrual basis governmental funds are adjusted for which of the following events?

Internal service funds are typically reported in the governmental activities sections of the government-wide statements.

The Statement of Net Position and Statement of Activities and Statement of Cash Flows are required for the government-wide financial statements.

Assume a government reported Other Financing Sources - Proceeds of Bonds in the amount of $1,000,000 in the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances. The adjustments necessary to convert to the accrual basis of accounting would result in an increase of $1,000,000 when preparing the reconciliation from the changes in fund balances in that statement to the changes in net position in the governmental funds column in the Statement of Activities.

Which of the following statements is not correct?

The City of Greystone maintains its books so as to prepare fund accounting statements and prepares worksheet adjustments in order to prepare government-wide statements. You are to prepare, in journal form, worksheet adjustments for each of the following situations: A. The City levied property taxes for the current fiscal year in the amount of $8,000,000. At year-end, $720,000 of the taxes had not been collected. It was estimated that $330,000 of that amount would be collected during the 60 days after the end of the fiscal year and that $250,000 would be collected after that time and the balance would be uncollectible. The City had recognized the maximum of property taxes allowable under modified accrual accounting. B. $179,000 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. C. In addition to the expenditures allowed under modified accrual accounting, the city computed that an additional $72,000 should be accrued for compensated absences. D. In the Statement of Revenues, Expenditures, and Changes in Fund Balances, General Fund transfers out included $400,000 to a debt service fund and $270,000 to a special revenue fund. General Fund transfers in included $1,000,000 from an enterprise fund.

An asset may be considered impaired if either the decline in the service utility is unexpected or the amount of the decline in service utility is large.