On January 1, Year 4, the government leased a police car for five years at \($20,000\) per year with the first payment being made on December 31, Year 4. This is a capitalized lease. Assume that, at a reasonable interest rate of 10 percent, the present value of a five-year annuity due is \($62,000\). In the government-wide financial statements, the government recorded a \($20,000\) increase in expense and a \($20,000\) reduction in cash as its only entry. In the fund-based financial statements, the government increased Expenditures by \($20,000\) and reduced Cash for \($20,000\) as its only entry.

a. According to the information provided, the overall increase in net assets reported was

\($140,000\). What was the correct overall change in the net assets in the government-wide financial statements?

b. According to the information provided, the General Fund reported an increase of \($30,000\) in its fund balance. What was the correct change in the fund balance for the General Fund?

The City of Wolfe has issued its financial statements for Year 4 (assume that the city uses a calendar year). The city maintains the General Fund made up of two functions: (1) education and (2) parks. The city also utilizes capital projects funds for ongoing construction and an enterprise fund to account for its art museum. It also has one discretely presented component unit.