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

The City of Henderson reported a change in fund balances of $2,267,000 in its governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balances for the year ended December 31, 2017. In addition, the following information is relevant: A. Capital outlay expenditures amounted to $8,755,000 in the modified accrual statement. General government capital 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 $390,000. 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 $217,000 would be collected more than 60 days from year-end. The City had recognized the maximum permitted under modified accrual accounting. D. $205,000 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 $612,000 for principal. No adjustment was necessary for interest accruals at year-end. F. Long term compensated absences liabilities increased $120,000 from the previous year. Required: Prepare a reconciliation from the change in fund balances reported above to the change in Net Position in the governmental column in the government-wide Statement of Activities for the year ended December 31, 2017.

Which of the following is considered a source of general revenue in the Government-wide Statement of Activities?

Where in the basic financial statements would one find fiduciary activities reported?

When using the modified approach to account for infrastructures, expenditures to extend the life of the infrastructure assets are not capitalized.

Using the worksheet approach, general governmental long term assets and long term debt have a balance of zero until the worksheet entries are made.

Balances from enterprise fund statements, Statement of Net Position and Statement of Revenues, Expenses, and Changes in Fund Net Position, are reported in the business-type activities sections of government-wide statements.

When using the modified approach to record infrastructure, expenditures to widen a two-lane road to four lanes would be charged to an expense, in lieu of depreciation.

A government incurred expenditures for its infrastructure as follows: $20 million for general repairs; $22 million to extend the life of existing infrastructure; $21 million for improvements and additions. If depreciation is to be charged, the amount would be $23 million. Which of the following would be true?

Which of the following items are added to government-wide financial statements through worksheet journal entries?

A local government purchased a building and recorded the event by debiting Expenditures - Capital Outlay and crediting Cash. What would be the worksheet entry to prepare the government-wide statements in the year of acquisition)?

The following information is available for the preparation of the government-wide financial statements for the City of Shortsville for the year ended June 30, 2017: Required: From the information given above, prepare, in good form, a Statement of Activities for the City of Shortsville for the year ended June 30, 2017. Shortsville has no component units.

A government incurred expenses for its infrastructure as follows: $25 million for general repairs; $20 million to extend the life for existing infrastructure; and $22 million for additions and betterments. The infrastructure has a basis of $400 million and would be depreciated over a 40 year life, if depreciation were charged. The government chooses to use the modified approach to record infrastructure. The total amount that would be shown as expense in the Statement of Activities would be:

The difference between assets and liabilities in the government-wide statements is called Net Position.

When converting from governmental fund financial statements to the governmental activities column of the government-wide statements, the proceeds from the sale of capital assets which were listed as an "other financing source" are eliminated and the gain or loss is recorded when preparing the government-wide statements.

Balances from the enterprise funds' Statement of Net Position and Statement of Revenues, Expenses, and Changes in Fund Net Position are entered directly to the business-type activities sections of the government-wide statements.

Which of the following would be included in the Equity section of the government-wide Statement of Net Position?

A governmental fund's Statement of Revenues, Expenditures, and Changes in Fund Balances reported expenditures for capital outlay in the amount of $5,000,000. Capital assets for that government cost $110,000,000, including $20,000,000 in land. Depreciable assets are amortized over 20 years, on average. The reconciliation from the governmental funds changes in fund balances to the governmental activities change in Net Position would reflect aan):

Which of the following is NOT long-term debt that would be reported in the government-wide statements?

Which of the following statements is correct with respect to general long-term debt.

Under GASB standards, general capital assets should not be reported as assets in governmental funds but should be reported in the governmental activities column of the government-wide Statement of Net Position.