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32. For the purpose of this question, we'll simplify the equations as follows: Government-wide: Assets - Liabilities = Net Position General Fund: Assets - Liabilities
32. For the purpose of this question, we'll simplify the equations as follows: Government-wide: Assets - Liabilities = Net Position General Fund: Assets - Liabilities Fund Balance Assume the following transactions: At the beginning of the year, the General Fund purchased equipment at a cost of $50,000, signing a five-year promissory note. The equipment has a useful life of five years. At the end of the year, $10,000 was depreciated. At the end of the year, the General Fund paid $10,000 in principal and $5,000 in interest. The net result of these three transactions in "Net Position" and "Fund Balance" is: Numbers in parentheses signify reduction. Change in Net Position Fund Balance B $ b $ $ d $ 30,000 $ (10,000) $ (15,000) $ (10,000) $ 35,000 (10,000) (15,000) (15,000) I 33. When a government does advanced refunding (or in-substance defeasance) and the amount of escrow assets is greater than the book value of the bonds to be withdrawn, the loss on bond refunding affects the government-wide financial statements: a. Not at all, because the loss is not recognized. b. It is presented in the Statement of Activities as Loss on bond refunding for the full amount of the loss c. It is presented in the Statement of Net Position as "Deferred outflow of resources" and is amortized over the remaining life of existing debt or the life of new debt, whichever is shorter. d. It is presented in the Statement of Net Position as "Deferred inflow of resources" and is amortized over the remaining life of existing debt or the life of new debt, whichever is shorter.
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