Question
Chapter 9 Adjusting and Closing Entries for Governmental Activities, Government-Wide Level; Preparation of Government-Wide and Major Fund Financial Statements Before the 2017basic financial statements, both
Chapter 9 Adjusting and Closing Entries for Governmental Activities, Government-Wide Level; Preparation of Government-Wide and Major Fund Financial Statements
Before the 2017basic financial statements, both government-wide and fund, can be prepared for the City of Bingham, you must first record and post adjusting and closing entries for governmental activities as described below.
a. [Para. 9-a] Record depreciation expense for the year 2017 in the governmental activities general journal at the government-wide level using the following information. Verify accuracy of the adjusting entries and post to the general ledger by clicking [Post Entries].
Depreciation Expense Applied to Functions:
General Government $ 704,000
Public Safety 1,408,000
Public Works 528,000
Health and Welfare 352,000
Culture and Recreation 352,000
Total depreciation expense $3,344,000
Depreciation Applicable to Asset Categories (Increases in accumulated depreciation):
Improvements Other Than
Buildings $ 198,000
Infrastructure 638,000
Buildings 506,000
Equipment 2,002,000
Total depreciation expense $3,344,000
b. [Para. 9-b] Provide the journal entries to reclassify the current portion of long-term debt related to the two serial bonds payable.
c. Although closing entries were made in each governmental fund 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, 2017, to close all temporary accounts for governmental activities at the government-wide level. These entries should also recognize changes in Net PositionNet Investment in Capital Assets and Net PositionRestricted for Debt Service. For each account to be closed or reclassified, be sure the check mark for [Closing Entry] is on and that Closing Entry appears in the [Transaction Description] box. Post the closing entries to the general ledger by clicking on [Post Entries].
Before closing the City of Bingham, click on [File], and [Save/Save As] to save your work.If you close the file by clicking on the [X] box you will be asked if you want to save your changes before closing.
d. 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 all government-wide and fund financial statements that must be presented by the City of Bingham in order for its basic financial statements to be in conformity with generally accepted accounting principles. (See the list that follows this paragraph and Illustrations 9-3 through 9-8 and Illustrations A2-1 through A2-9 of the Reck and Lowensohn textbook for examples of these statements.) We recommend that you use Excel to prepare these financial statements; however, your instructor may require that they be prepared manually. Since the Water Utility Fund is the only fund in the proprietary funds category, you may reprint the statement of net position, statement of revenues, expenses, and changes in net position and the statement of cash flows prepared for the Water Utility Fund as the required statements for the proprietary fund basic financial statements, with suitable change in the titles of the statements, to meet the requirement of all proprietary type funds and Business-type Activities in the government-wide financial statements.
(Note: The City of Bingham is a primary government and has no other organizations for which it is accountable as component units.Also, the FY 2018 financial information for the Investment Pool Fund is not included in any of the basic financial statements you are preparing, as the statements you are preparing pertain only to FY 2017.)
Government-wide Financial Statements
1. Statement of net position
2. Statement of activities
Fund Financial Statements
1. Balance sheetgovernmental funds (with reconciliation of this statement to the government-wide statement of activities)
2. Statement of revenues, expenditures, and changes in fund balancesgovernmental funds (with reconciliation of this statement to the government-wide statement of activities)
3. Statement of net positionproprietary funds
4. Statement of revenues, expenses, and changes in fund net positionproprietary funds
5. Statement of cash flowsproprietary funds
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