9-12.

The fund-basis financial statements of Cherokee Library District (a special-purpose government engaged only in governmental activities) have been completed for the year 2020 and appear in the second and third tabs of the Excel spreadsheet provided with this exercise. The following information is also available:

a. Capital Assets

• Capital assets purchased in previous years through governmental-type funds total $21,050,000 and had accumulated depreciation of $5,770,000.
• Depreciation on capital assets used in governmental-type activities amounted to $434,000 for 2020.
• No capital assets were sold or disposed of in 2020, and all purchases are properly reflected in the fund-basis statements as capital expenditures.

b. Long-Term Debt

• There were $10,500,000 of outstanding long-term notes associated with governmental-type funds as of January 1, 2020. Interest is paid monthly.
• December 31, 2020, notes with a face value of $6,370,000 were issued at par. In addition, principal payments totaled $1,340,000.
• The notes, and any retained percentage on construction contracts, are associated with the purchase of capital assets.

c. Deferred Inflows

• Deferred inflows are comprised solely of property taxes expected to be collected more than 60 days after year-end. The balance of deferred taxes at the end of 2019 was $92,000.

d. Transfers: Transfers were between governmental-type funds.

e. Beginning net position for the government-wide statements totaled $20,247,121 as January 1, 2020. This amount has already been entered in the Statement of Activities.

Required:

Use the Excel template provided to complete the following requirements. A separate tab is provided for each requirement:

a. Prepare the journal entries necessary to convert the governmental fund financial statements to the accrual basis of accounting.

b. Post the journal entries to the (shaded) Adjustments column to produce a Statement of Activities. You do not have to post amounts debited or credited to "(beginning) net position." These have been reflected in item e above.

c. Post the journal entries to the (shaded) Adjustments column to produce a Statement of Net Position. Calculate the appropriate amounts for the Net Position accounts, assuming there are restricted net position.

Type journal entries to convert to the accrual basis in the space below and post them to the financial statements on the next two tabs. credits debits 21,050,000 2. Capital assets Accumulated depreciation Net position Depreciation expense Accumulated depreciation 5,770,000 15,280,000 434,000 434,000 Capital assets Capital outlay expenditure b. Net position Notes payable 10,500,000 10,500,000 OFS - Proceeds of debt Notes payable 6,370,000 6,370,000 1,340,000 Notes payable Debt service expenditure - Principal 1,340,000 c. 92,800 Property tax revenue Net position 92,800 Deferred property taxes Property tax revenue d. OFS - Transfers in OFU - Transfers out General Fund Capital Total Adjustments to Projects Governmental Government- Fund Funds wide Statement of Activities $20,205,519 2,269,751 20,205,519 2,415,552 20,205,519 2,415,552 145,801 Revenues Property Taxes Intergovernmental revenues Investment income: Interest income Net increase in fair value of investments Total Revenues 461,684 161,691 23,098,645 461,684 161,691 23,244,446 461,684 161,691 23,244,446 145,801 14,032,711 5,474,632 14,032,711 5,474.632 14,032,711 5,474,632 Expenditures / Expenses Current: Public services Library Materials Depreciation Capital Outlay Debt Service Principal Interest Total Expenditures 453,033 7,539,481 7.992,514 7,992,514 1,340,000 830,904 22,131,280 1,340,000 830.904 29,670,761 1,340,000 830,904 29,670,761 7,539,481 Excess (Deficiency) of Revenues Over Expenditure 967,365 (7,393,680) (6,426,315) (6,426,315) Other financing sources (uses) Proceeds of debt Transfers in Transfers out total other financing sources (uses) 6,370,000 2,500,000 6,370,000 2,500,000 (2,500,000) 6,370,000 6,370,000 2,500,000 (2,500,000) 6,370,000 (2,500,000) (2,500,000) 8,870,000 Net Change in Fund Balance Net Position Fund Balance/Net Position, January 1 Fund Balance Net Position. December 31 (1,532,635) 1,476,320 (56,315) 12,609,441 2,764,880 15,374,321 $11,076,806 $4,241,200 $ 15,318,006 (56,315) 20,247, 121 $ 20,190,806 General Fund Capital Projects Fund Total Adjustments Governmental to Government Statement of Funds wide Net Position Assets Cash Investments Taxes Receivable - Gross Interest Receivable Prepaid Items Capital Assets Accumulated Depreciation Total Assets $ 11,034.232 $4,825,591 S 15,859,823 683,722 683,722 131,534 131,534 2,487 2,487 596,901 596,901 $ 15,859,823 683,722 131,534 2,487 596,901 $ 12,448,876 S4,825,591 S 17,274,467 S $ 17,274,467 324,609 Liabilities, Deferred Inflows and Fund Balances Liabilities Accounts Payable 877,468 Accrued Liabilities 400,602 Contracts payable - Retained % Long-term Notes Payable Total Liabilities 1,278,070 Deferred Inflows Deferred Inflows - Property Taxes 94,000 1,202,077 400,602 259,782 1,202,077 400,602 259,782 259,782 584,391 1,862,461 1,862,461 94,000 94,000 596,901 596.901 Fund Balances Nonspendable Prepaid Items Assigned Library purchases Capital projects Unassigned Total Fund Balances 585,220 4,241,200 585,220 4,241,200 9,894,685 15,318,006 9,894,685 11,076,806 4,241,200 Net Position Net investment in capital assets Unrestricted (259,782) 15,671,788 S 15,412,006