Cardinal City Governmental Project

Introduction

Cardinal City is a small town in Delaware County. It has one general fund and operates a small electric cooperative. There are no component units. To complete the financial statements for its annual report, the city must prepare a government wide statement of net position and a statement of activities.

The citys pre-closing trial balance is provided. As the controller for the city, you need to make select entries to appropriately close the books and complete the required financial statements.

Cardinal City will maintain two funds:

Fund Number	Fund Name
101	General
591	Proprietary (for an electric utility)

A separate worksheet tab is provided to post the working paper postings, titled as WP Postings. This is a good tab to begin to adjust for the specific entries below.

Exercises

Additional Entries

The entries we will make for this project include:

Depreciation for buildings of $500,000 and infrastructure of $580,000 needs to be recorded. (Government wide impact only). All building depreciation is to be allocated to the public safety department as all other buildings are fully depreciated. The infrastructure depreciation will be charged to the general government.

Working paper postings for depreciation

Dr. Account #501, Fund #101, Amount $1,080

Cr. Account #175, Fund #101, Amount $500

Cr. Account #185, Fund #101, Amount $580

There is an interest payment that needs to be accrued on the bonds payable of $350,000.

Working paper postings for interest on bonds

Dr. Account #500, Fund #101, Amount $350

Cr. Account #240, Fund #101, Amount $350

The city leased a $100,000 emergency communications system for its police department over a period of three years with yearly payments of $36,725 with interest rate of 5.005%. The lease qualifies as a capital lease. Thus, the city, in its government-wide statements, must record an asset and a long-term lease liability.

Working paper postings for the capital lease

Dr. Account #190, Fund #101, Amount $100

Cr. Account #205, Fund #101, Amount $100

The government is starting the electric utility. At year end, it transfers $200,000 in cash to the electric utility to begin to employ the consultants and people to construct the necessary infrastructure. (This is a reclassification that is not currently included in the check figure below)

Posting

Post all of the working paper postings using the template located on the WP Postings worksheet tab in the Excel project file. Once all of the transactions have been posted, carefully review your data entry. The total for the working paper postings should be $25,469 after the closing entry has been posted but prior to the reclassification entry.

Reports

Prepare the government-wide financial statements for the fiscal year ending March 31, 2018.

			Cardinal City
			Pre-Closing Trial Balance
			30-Mar-18
			(000's omitted)
			Fund Balances		Adjustments		Final Balances
Account Number	Account		Debits	Credits	Debits	Credits	Debits	Credits
101	Cash		3639
103	Investments		7299
105	Taxes Receivable - Delinquent		5788
106	Estimated Uncollectible Taxes - Delinquent			49
107	Accounts Receivable - Electric
108	Accounts Receivable - Allowance for Bad Debt
132	Due from Other Funds		645
133	Due from Other Governments		6343
150	Construction in Progress
160	Land		8720
170	Buildings		25680
175	Accumulated Depreciation - Buildings			8021
180	Infrastructure		85768
185	Accumulated Depreciation - Infrastructure			45603
190	Machinery & Equipment		28720
195	Accumulated Depreciation - Machinery & Equipment			13785
202	Accounts Payable			7764
205	Accrued Liabilities			4765
232	Due to Other Funds			748
235	Current Portion of Long-term Debt			8600
240	Bonds Payable			28700
800	Net Position - Net Investment in Capital Assets			45259
802	Net Position - Restricted for Debt Service			2123
803	Net Position - Unrestricted			6598
300	Program Revenues - General Government - Charges for Services			4411
300	Program Revenues - Public Safety - Charges for Services			996
300	Program Revenues - Culture & Recreation - Charges for Services			359
300	Program Revenues - General Government - Operating Grants & Contributions			307
300	Program Revenues - Public Works - Capital Grants & Contributions			1680
301	General Revenues - Property Taxes			13665
302	General Revenues - Interest & Penalties			746
330	General Revenues - Interest Income			345
401	Expenditures - General Government		2468
401	Expenditures - Public Safety		11577
401	Expenditures - Public Works		5311
401	Expenditures - Culture & Recreation		1817
402	Expenditures - Interest on Long-term Debt		749
500	Interest Expense
501	Depreciation Expense
			194524	194524