The City of Coyote records an art display within its general fund. The display generates revenues of $9,000 this year as well as expenditures of $45,000 ($15,000 in expenses and $30,000 to buy land for the display). The CPA firm determines that the city should report this program as an enterprise fund activity because of its association with the city’s art museum.

a. Based on the information provided, what was the correct change in the fund balance for the general fund for 2020?

b. What was the correct overall change in the city’s net position on government-wide financial statements?

c. What was the correct change in the net position of the enterprise fund on the fund financial statements?

Assume that the City of Coyote has produced its financial statements for December 31, 2020, and the year then ended. The city’s general fund was only used to monitor education and parks. Its capital projects funds worked in connection with each of these functions at times during the current year. The city also maintained an enterprise fund to account for its art museum.

The government-wide financial statements provide the following figures:

• Education reports net expenses of $600,000.
• Parks reports net expenses of $100,000.
• Art museum reports net revenues of $50,000.
• General government revenues for the year were $800,000 with an overall increase in the city’s net position of $150,000.

The fund financial statements provide the following for the entire year:

• The general fund reports a $30,000 increase in its fund balance.
• The capital projects fund reports a $40,000 increase in its fund balance.
• The enterprise fund reports a $60,000 increase in its net position.

The city asks the CPA firm of Abernethy and Chapman to examine several transactions that occurred during 2020 and indicate how to correct any erroneous reporting. Officials also want to know the effect of each error. View each of the following situations as independent.