Chapter 9 Adjusting and Closing Entries for Governmental Activities, Government-wide Level; Preparation of Government-wide and Major Fund Financial Statements a. Prior to preparing financial statements at the end of FY 2014, it is necessary to record depreciation expense for the year for governmental activities at the government-wide level. Based on general capital assets assigned to specific functions, depreciation expense related to equipment and infrastructure is allocated to functions as shown below: General Government Public Safety Public Works Culture and Recreation Totals Equipment $ 42,348 220,212 84,696 76,224 $423,480 Infrastructure $118,344 $118,344 Buildings $37,600 65,800 41,360 43,240 $188,000 Required: [Para. 9-a] Record depreciation expense for the year 2014 in the governmental activities general journal at the government-wide level. Verify accuracy of the adjusting entries and post to the general ledger by clicking [Post Entries]. b. Although closing entries were made in each fund in Chapters 4 through 6 of this cumulative problem, they have not yet been recorded at the government-wide level. Required: Closing Entries. Record the journal entries required on December 31, 2014 to close all temporary accounts for governmental activities at the governmentwide level. These entries should also recognize changes in the accounts Net Position Net Investment in Capital Assets (decrease of $720,668), Net PositionRestricted for Public Safety (increase of $15,000), Net PositionRestricted for Capital Projects (increase of $390,000), and Net PositionRestricted for Debt Service (increase of $28,000). For each account to be closed or reclassified, be sure and click on the check mark for [Closing Entry] and that Closing Entries appears in the [Transaction Description] box. Post the closing entries to the general ledger by clicking on [Post Entries]. Please remember that before closing the City of Smithville, you must click on [File], and [Save/Save As] to save your work. Your work is NOT automatically saved. c. Use the exportable trial balances used in Chapters 2 through 7 of this problem, and the exportable pre-closing trial balance and post-closing trial balance for governmental activities, to prepare required government-wide and governmental fund financial statements and reconciliations that the City of Smithville must present for its basic financial statements to be in conformity with generally accepted accounting 35 principles. (See Illustrations A2-1 through A2-6 of the Reck, Lowensohn, and Wilson textbook for examples of these statements.) We recommend that you use Excel to prepare these financial statements; however, your instructor may want you to do these manually. (Note: The City of Smithville is a primary government and has no other organizations for which it is accountable as component units.) 36 Appendix A - Adobe Flash Player Security Settings When first starting the Smithville program in a browser, an Adobe Flash Player Security warning pop-up might show up: Click on "Settings..." button to be directed to the Adobe Flash Player Settings Manager and select "Always allow" radio button to allow the player working properly: Comment: The above screenshots are result of the default features of the Flash player and it is common across all the platforms. Whenever user is getting a popup message, the setting needs to be changed as shown in the above screenshot. --The End