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14 Jul 2018

Impact of Government Events

Indicate how each of the following transactions impactsthe fund balance of the general fund for fund-based financialstatements, and what the impact is on the net asses balance for thegovernmental finds for government-wide financialstatements.

Fund A transfers $20,000 to Fund B. For each of the following,indicate whether the statement is true or false and, if false,explain why.

a.If Fund A is the general fund and Fund B is anenterprise fund, nothing will be shown for this transfer on thestatement of activities within the government-wide financialstatements.

b.If Fund A is the general fund and Fund B is a debtservice fund, nothing will be shown for this transfer on thestatement of activities within the government-wide financialstatements.

c.If Fund A is the general fund and Fund B is anenterprise fund, a $20,000 reduction will be reported on thestatement of revenues, expenditures, and other changes in fundbalance for the governmental funds within the fund financialstatements.

d.If Fund A is the general fund and Fund B is a specialrevenue fund (which is not considered a major fund), no changeswill be shown on the statement of revenues, expenditures, and otherchanges in fund balance within the fund financial statements.

e.If Fund A is the general fund and Fund B is aninternal service fund and this is for work done, the general fundwill report an expense of $20,000 within the fund financialstatements.

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Deanna Hettinger
Deanna HettingerLv2
15 Jul 2018

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The City of Wolfe has issued its financial statements for Year 4(assume that the city uses a calendar year). The city’s GeneralFund is made up of two functions: (1) education and (2) parks. Thecity also utilizes capital projects funds for ongoing constructionand an enterprise fund to account for an art museum. It also hasone discretely presented component unit. The government-widefinancial statements indicated the following Year 4 totals:Education had net expenses of $710,000. Parks had net expenses of$130,000. Art museum had net revenues of $80,000. General revenueswere $900,000; the overall increase in net position was $140,000.The fund financial statements issued for Year 4 indicated thefollowing: The General Fund had an increase of $30,000 in its fundbalance. The Capital Projects Fund had an increase of $40,000 inits fund balance. The Enterprise Fund had an increase of $60,000 inits net position. Officials for Wolfe define “available” as currentfinancial resources to be paid or collected within 60 days. OnJanuary 1, Year 4, the government leased a police car for 5-yearsat $20,000 per year with the first payment being made on December31, Year 4. This is a capitalized lease. Assume that, at areasonable interest rate of 10 percent, the present value of a5-year annuity due is $62,000. In the government-wide financialstatements, the government recorded a $20,000 increase in expenseand a $20,000 reduction in cash as its only entry. In the fundfinancial statements, the government increased Expenditures by$20,000 and reduced Cash for $20,000 as its only entry. a.According to the information provided above, the overall increasein net position reported was $140,000. What was the correct overallchange in the net position in the government-wide financialstatements?

The City of Amarillo is authorized to issue $8,400,000, 4percent regular serial bonds in 2017 for the construction a newexit off the interstate highway within city limits. The bondsmature in equal annual amounts beginning on January 1, 2018 for 10years and pay interest on January 1 and July 1. The city isrequired to use all accrued interest and premiums to service thedebt. The funds to pay the interest will be transferred from theGeneral Fund. The county’s fiscal year end is December 31.

a. Prepare the budgetary entries for 2017 assuming that thebonds were scheduled to be issued on January 2. Assume that theJanuary 1, 2018 principal and interest payments will be included inthe 2018 budget.

b. The bonds were sold on February 1, 2017 at 101. Prepare thejournal entries needed to record the issuance of the bonds,including the entries required in the debt service fund and anyentries required in the governmental activities general ledger atthe government-wide level.

c. Prepare the entry required to reflect the transfer of fundsfrom the General Fund in the debt service fund. (You may ignore theentry in the General Fund.)

d. Prepare the journal entries needed to record first interestpayment made on July 1, including the entries required in the debtservice fund and any entries required in the governmentalactivities general ledger at the government-wide level. Assume thatthe straight-line method is used for premium amortization.

In Fulbright County, the Parks and Recreation Departmentconstructed a library in one of the county’s high growth areas. Theconstruction was funded by a number of sources. Below is selectedinformation related to the Library Capital Project Fund. Allactivity related to the library construction occurred within the2017 fiscal year.

Required

Prepare a journal entry for capital projects fund andgovernmental activities at the government-wide level.(If no entryis required for a transaction/event, select "No Journal EntryRequired" in the first account field.)


1. The county issued $7,900,000, 6 percent bonds, with interestpayable semiannually on June 30 and December 31. The bonds solldfor 101 on july 30, 2016. Proceeds from the bonds were to be usedfor construction of the library, with all interest and premiumsreceived to be used to service the debt issue. Assume the premiumand interest are recorded directly in the debt service fund.

Capital Project fund:

Government Activities:

2. A $840,000 federal grant was receive to help financeconstruction of the library.

Required

Prepare a journal entry for capital projects fund andgovernmental activities at the government-wide level.(If no entryis required for a transaction/event, select "No Journal EntryRequired" in the first account field.)


1. The county issued $7,900,000, 6 percent bonds, with interestpayable semiannually on June 30 and December 31. The bonds solldfor 101 on july 30, 2016. Proceeds from the bonds were to be usedfor construction of the library, with all interest and premiumsreceived to be used to service the debt issue. Assume the premiumand interest are recorded directly in the debt service fund.

Capital Project fund:

Government Activities:

3. The library special revenue fund transferred $440,000 for usein construction of the library.

Capital Project fund:

Government Activities:

4. A construction contract was awarded in the amount of$6,990,000

Capital Project fund:

Government Activities:

5. The library was completed on June 1, 2017, four months aheadof schedule. Total construction expenditures for the libraryamounted to $9,160,500. When the project was completed, the cost ofthe library was allocated as follows. $295,000 to land, $6,390,000to building to building, and the remainder to equipment.

5a. Capital projects fund: Record the completion of constructionof the library

5b. Capital projects fund: Record the payment upon completion ofcapital project.

5c. Govermenatal activities: Record the completion ofconstruction of the library

5d Governmental activities: Record the capitalization of eachitem.

6. The capital projects fund temporary accounts were closed tofund balance-- restricted. The resources are restricted becausethey were obtained from bonded debt issued exclusively for libraryconstruction. The capital projects fund were closed by transferringremainin funds to the debt service fund for use in libraryconstruction debt repayment.

6a Capital Project fund: close the completion of construction ofthe library

6b Capital project fund: Record the transfer to the debt servicefund.

6c Capital project fund: Close the remaining temporary accountto Fund Balance- restricted.

6d. Governmental activities:

These are my options

No Journal Entry Required

Accumulated Depreciation

Appropriations

Bonds Payable

Budgetary Fund Balance

Buildings

Cash

Construction Expenditures

Construction Work in Progress

Encumbrances

Encumbrances Outstanding

Estimated Revenues

Expenditures

Expenses—General Government

Expenses—Public Safety

Fund Balance—Assigned

Fund Balance—Restricted

Fund Balance—Unassigned

Gain on Sale of Machinery

Interest Expenditures

Interest Payable

Interfund Transfers Out

Land

Loss on Sale of Machinery

Machinery and Equipment

Other Financing Sources—Interfund Transfers In

Other Financing Sources—Proceeds of Bonds

Other Financing Uses

Premium on Bonds Payable

Proceeds of Bonds

Program Revenues—Culture and Recreation—Capital Grants andContributions

Program Revenues—Public Safety

Revenues

Vouchers Payable

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