Question
Calculate debt service burden and rate of debt payback Assume the following information was derived from the fund financial statements prepared by the city of
Calculate debt service burden and rate of debt payback
Assume the following information was derived from the fund financial statements prepared by the city of Tallahassee, Florida for the fiscal year ended September 30, 2019:
City of Tallahassee | |
---|---|
General Fund | |
Balance Sheet | |
(in thousands) | |
Assets: | |
Cash and cash equivalents | $2,480 |
Due from other governments | 0 |
All other assets | 11,848 |
Total assets | $14,328 |
Liabilities: | |
Total current liabilities | $11,287 |
Fund balance: | |
Nonspendable | 1,500 |
Committed | 0 |
Assigned | 0 |
Unassigned | 1,541 |
Total fund balance | 3,041 |
Total liabilities and fund balance | $14,328 |
City of Tallahassee | |
---|---|
General Fund | |
Statement of Revenues, Expenditures, | |
and Changes in Fund Balance | |
(in thousands) | |
Total revenues | $109,901 |
Total expenditures | 164,473 |
Excess of revenues over (under) expenditures | -54,572 |
Other financing sources (uses): | |
Transfers in | 49,597 |
Transfers out | -21,522 |
Proceeds from sale of capital assets | 430 |
Total other financing sources (uses) | 28,505 |
Net change in fund balance | -26,067 |
Fund balance, October 1, 2019 | 29,108 |
Fund balance, September 30, 2019 | $3,041 |
Assume the city of Tallahassee’s total tax-supported debt service expenditures in fiscal year 2019 were $7,940 thousand. The schedule of debt service requirements in the notes to the 2019 financial statements showed that Tallahassee’s total governmental activity debt was $96,125 thousand, of which $37,515 thousand was scheduled to be paid off between 2020 and 2024, $17,475 thousand was scheduled to be paid off between 2025 and 2029, and the remainder was scheduled to be paid off between 2030 and 2039.
Calculate the following for the city of Tallahassee:
Round all percentages to one decimal.
a) debt service burden Answer
%
b) percentage of debt principal payback in the next five years Answer%
c) percentage of debt principal payback in the next ten years Answer%
d) How does the city of Tallahassee's debt principal payback over the next ten years
compare to the credit agency norms described in the textbook?
Step by Step Solution
3.34 Rating (157 Votes )
There are 3 Steps involved in it
Step: 1
Answer Explanation d Debt Principles Subtract the interest o...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started