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

GASB requires that infrastructure be depreciated on the government-wide statements unless the government chooses to use the modified approach which expenses amounts expended to increase the life of infrastructure.

Which of the following would not be an adjustment for long-term debt when preparing government-wide financial statements?

Which of the following would not need to be addressed/adjusted in compiling the government-wide statements?

Government-wide financial statements are prepared using the modified accrual basis of accounting.

Governments may choose either to depreciate infrastructure assets or use the modified approach.

Which of the following is false regarding 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 except:

Which of the following is true regarding the government-wide Statement of Activities?

The Village of Canandaigua determined that, as of July 1, 2016, infrastructure assets estimated at $375 million were in place, with an estimated useful life of 25 years. During the year ended June 30, 2017, expenditures were $9 million for the routine maintenance of infrastructure, $3 million to extend the life of existing infrastructure, and $15 million for infrastructure additions and improvements. Required: a) If the modified approach is used, what would be the amount charged to expense during the fiscal year ended June 30, 2017. What amount would be capitalized? b) What amount would have been charged to expense if the modified approach were not used? What amount would be capitalized?

GASB requires that general fixed assets acquired through General, special revenue or capital projects funds be included in the government-wide financial statements.

A government had the following transfers reported in its governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balances: 1) a transfer from the General Fund to a debt service fund in the amount of $l,100,000; 2) a transfer from the General Fund to an internal service fund in the amount of $1,300,000; and 3) a transfer from the General Fund to a special revenue fund in the amount of $500,000. The amount that would be shown as a transfer out in the governmental activities column in the Statement of Activities would be:

The City of Thomasville maintains its books so as to prepare fund accounting statements and prepares worksheet adjustments in order to prepare government-wide financial statements. Required: You are to prepare, in journal form, worksheet adjustments for each of the following situations. A. General fixed assets, as of the beginning of the year, which had not been recorded, were as follows: Land \ 60,000,000 Buildings 542,000,000 Improvernents other than buildirgs 245,000,000 Equipment 85,000,000 Accumulated depreciation, capital assets 248,400,000 B. During the year, expenditures for capital outlays amounted to $12,825,000. Of that amount, $10,710,000 was for buildings; $1,755,000 was for improvements other than buildings, $ 9,000 was capitalized interest and the remainder was for land. C. The capital outlay expenditures outlined in B) were completed at the end of the year no depreciation until next year). For purposes of financial statement presentation, all capital assets are depreciated using the straight-line method, with no estimated salvage value. Estimated lives are as follows: buildings, 50 years; improvements other than buildings, 20 years; equipment, 10 years. D. Equipment with a cost of $110,000 and accumulated depreciation at the time of sale of $60,000 was sold for $25,000.

Debt limit is the total amount of indebtedness of specified kinds that is allowed by law to be outstanding at any time.

Internal Service Funds are most commonly incorporated into the governmental activities category of the government-wide statements.

In addition to the fund basis statement, GASB requires government-wide statements that are prepared using the accrual basis and the current financial resources measurement focus.

With respect to the content of government-wide statements, which of the following is correct?

The City of Charlestown levied property taxes in the amount of $10,000,000. The taxes were levied July 1, 2016 for the fiscal year ended June 30, 2017. During the year ended June 30, 2017, $8,900,000 in property taxes were collected from this levy. It is estimated that $620,000 will be collected during the next 60 days, $300,000 will be collected more than 60 days after June 30, 2017, and $180,000 will never be collected. -When preparing the government-wide financial statements, how much property tax revenue should be recognized for the year ended June 30, 2017?

The City of Madison, a general purpose government, reported fund balances in the amount of $19,700,000 in the governmental funds balance sheet dated December 31, 2017. In addition, the following information is relevant: A. General government capital assets amounted to $28,000,000. Accumulated depreciation of those capital assets amounted to $13,000,000. Enterprise fund capital assets amounted to $ 17,000,000 with accumulated depreciation of $ 8,400,000. B. Internal service fund's net assets amounted to $2,500,000. These were reported in the proprietary funds fund basis statements but serve departments in the General Fund. C. Property Taxes, which should be recognized as revenue in the government-wide statements, amounted to $ 200,000. The balance of deferred inflows - property taxes from the previous year was $ 170,000. D. Liabilities, in addition to the amount reported in the governmental funds balance sheet included accrued interest payable, $300,000; E. General long-term liabilities of the government amounted to 1) general obligation bonds of $ 6,000,000 and 2) compensated absences payable of $1,500,000. Revenue Bonds Payable in the enterprise fund totaled $ 2,000,000. Required: Prepare a reconciliation from the fund balances recognized in the governmental funds balance sheet to the Net Position recognized in the governmental funds column of the government-wide statement of Net Position

A government recorded transfers out of the General Fund to the debt service fund in the amount of $ 600,000 and to the enterprise fund in the amount of $ 300,000. The amount that would be shown as a transfer in the governmental activities column of the Statement of Activities would be:

With regard to the government-wide statements, indicate the three categories of Net Position that should be reported and describe what would be put into each category.