211.

Accounting and Reporting Principles. (L02-3 @ ) The financial statements of the Town of Fordville

consist of a statement of cash receipts and a statement of cash disbursements prepared by the town

treasurer for each of its three funds: the General Fund, the Road Tax Fund (special revenue fund), and the

Sewer Fund (enterprise fund). As required by state law, the town submits its financial statements to the

Office of the State Auditor; however, due to its small size, its financial statements have never had to be

audited by an independent auditor.

Because of its growing population (nearing 20,000) and increasing financial complexity, the town has

hired Emily Ramirez, who recently obtained her CPA license, to supervise all accounting and financial

reporting operations. Having worked two years for a CPA firm in a nearby town, Ms. Ramirez gained

limited experience auditing not-for-profit organizations, as well as compiling financial statements for

small businesses. Although she has little knowledge of governmental accounting, she is confident that her

foundation in business and not-for-profit accounting will enable her to handle the job.

Using her experience with not-for-profit organizations, for the year ended December 31, 2020,

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Ms. Ramirez prepared the following unaudited financial statements for the Town of Fordville.

Assuming the city wants to prepare financial statements in accordance with GASB standards, study the

financial statements and answer the questions that follow.

TOWN OF FORDVILLE Balance Sheet December 31, 2020 (unaudited) Assets Cash $ 1,740 Taxes receivable 18,555 Investments 7,468 Due from other governments 28,766 Land, buildings, and equipment (net of accumulated depreciation of $132,640) 287,5 Total assets $344,109 Liabilities and Net Assets Accounts payable Due to other governments Total liabilities Net assetswithout donor restrictions Net assetswith donor restrictions Total net assets Total liabilities and net assets TOWN OF FORDVILLE Statement of Activities Year Ended December 31, 2020 (unaudited) Revenues Property taxes $ 121,290 Charges for services 3,580 Sewer fees 6,859 Investment income 239 Total revenues 131,968 Expenses Government services 115,958 Sewer services 7,227 Miscellaneous 8.462 Total expenses 131,647 Increase in net assets 321 Net assets, January 1, 2020 327,953 Net assets, December 31, 2020 $ 328,274