EXERCISE 18-13 Determining a Governments Major Funds - Required:

Using Illustrations 18-9, 18-10, 18-13, and 18-14, determine which of Model Citys funds qualify as major funds using the percentage cutoffs. Calculate aggregate amounts for all other nonmajor funds, and indicate how they would be presented.

ILLUSTRATION 18-9

Model City

Proprietary Funds

Balance Sheet at December 31, 2011*

Business-Type

Activities Governmental

Enterprise Fund Activities

Sewer Fund Internal Service Fund

Assets

Current Assets:

Cash $ 100,000 $ 22,500

Receivables 451,000 100,000

Total Current Assets $ 551,000 $122,500

Noncurrent Assets:

Restricted Assets 509,000

Capital Assets (net of accumulated depreciation) 10,000,000 420,000

Construction in Progress 40,000

Total Noncurrent Assets 10,549,000 420,000

Total Assets $11,100,000 $542,500

Liabilities

Current Liabilities:

Current Liabilities (payable from current assets) $ 361,000 $ 27,500

Current Liabilities (payable from restricted assets) 282,000

Total Current Liabilities 643,000 27,500

Revenue Bonds Payable 4,200,000

Total Liabilities $ 4,843,000 $ 27,500

Net Assets

Invested in capital assets, net of related debt 5,558,000 420,000

Restricted 500,000

Unrestricted 199,000 95,000

Total Net Assets $ 6,257,000 $515,000

Total Liabilities and Net Assets $11,100,000 $542,500

ILLUSTRATION 18-10

Model City

Proprietary Funds

Statement of Revenues, Expenses, and Changes in Fund Net Assets

for the Year Ended December 31, 2011

Business-Type

Activities Governmental

Enterprise Fund Activities

Sewer Fund Internal Service Fund

Operating Revenues

Charges for Services $1,500,000 $200,000

Total Operating Revenues 1,500,000 200,000

Operating Expenses

Personal Services 675,000 185,000

Utilities 105,000 20,000

Depreciation Expense 500,000 15,000

Total Operating Expenses 1,280,000 220,000

Operating Income (loss) 220,000 (20,000)

Nonoperating Revenue (Expenses)

Interest Expense (10%) (420,000)

Total Nonoperating Revenue (expenses) (420,000)

Income Before Contributions and Transfers (200,000) (20,000)

Transfers OutGeneral Fund (150,000)

Change in Net Assets (350,000) (20,000)

Total Net Assetsbeginning of year 6,607,000 535,000

Total Net Assetsend of year 6,257,000 515,000

ILLUSTRATION 18-13

Model City

Governmental Funds*

Balance Sheets at December 31, 2011

Capital Special Total

Projects Revenue Permanent Governmental

Fund Debt Service Funds Fund Fund Funds

Land

Library and Acquisition

General Library and Civic Center Serial Classics Classics

Assets Fund Civic Center Term Bond Bond Acquisitions Endowment

Cash $ 63,250 $ 300,000 $ $19,000 $22,000 $ $ 404,250

Interest Receivable 12,500 4,000 7,500 24,000

Investments 106,000 1,000,000 100,000 300,000 1,506,000

Property Tax Receivable 127,750 2,000 129,750

Due from Other Funds 50,000 7,500 57,500

Due from State Government 250,000 250,000

Total Assets $347,000 $1,562,500 $104,000 $21,000 $29,500 $307,500 $2,371,500

Liabilities and Fund Balance

Vouchers Payable $ 73,000 $ 50,000 $ 123,000

Due to Other Funds 7,500 7,500

Total Liabilities $ 73,000 $ 50,000 $ $ $ $ 7,500 $ 130,500

Fund Balances:

Unreserved 83,000 312,500 395,500

Reserved for

Encumbrances 191,000 1,200,000 1,391,000

Debt Services 104,000 21,000 125,000

Other 29,500 300,000 329,500

Total Fund Balances 274,000 1,512,500 104,000 21,000 29,500 300,000 2,241,000

Total Liabilities and Fund

Balances $347,000 $1,562,500 $104,000 $21,000 $29,500 $307,500 $2,371,500

ILLUSTRATION 18-14

Model City

Governmental Funds*

Statement of Revenues, Expenditures, and Changes in Fund Balances

for the Year Ended December 31, 2011

Capital Special Total

Projects Revenue Permanent Governmental

Fund Debt Service Funds Fund Fund Funds

Land

Library and Acquisition

General Library and Civic Center Serial Classics Classics

Fund Civic Center Term Bond Bond Acquisitions Endowment

Revenues

Property Taxes $1,158,750 $316,000 $1,474,750

Licenses and Permits 170,500 170,500

State Granteducation 275,000 275,000

Intergovernmental $1,000,000 1,000,000

Charges for Services 130,500 130,500

Interest 6,000 12,500 $ 4,000 $ 30,000 52,000

Total Revenue $1,740,750 $1,012,500 $ 4,000 $316,000 $ 30,000 $3,103,250

Expenditures

Public Safety $ 480,000 $ 480,000

General Government 289,000 289,000

Highways and Streets 128,000 128,000

Sanitation 70,000 70,000

Health 141,000 141,000

Culturalrecreation 80,000 $ 18,000 98,000

Education 670,000 670,000

Debt Service

Principal $300,000 300,000

Interest 96,000 96,000

Capital Outlay $1,500,000 1,500,000

Total Expenditures $1,858,000 $1,500,000 $396,000 $ 18,000 $3,772,000

Excess (deficiency) of

revenues over

expenditures $ (117,250) $ (487,500) $(4,000) $80,000 $(18,000) $ 30,000 (668,750)

Other Financing Sources (Uses)

Proceeds from long-term

capital debt $2,100,000 $2,100,000

Transfers in $ 150,000 $100,000 $ 96,000 $ 30,000 376,000

Transfers out (96,000) (100,000) $(30,000) (226,000)

Total other $ 54,000 $2,000,000 $100,000 $ 96,000 $ 30,000 $(30,000) $2,250,000

Special Items

Proceeds from sale of

equipment $ 87,250 $ 87,250

Net change in fund balance 24,000 $1,512,500 $104,000 $ 16,000 $ 12,000 $ $1,668,500

Fund balancebeginning 250,000 5,000 17,500 300,000 572,500

Fund balanceending $ 274,000 $1,512,500 $ 21,000 $104,000 $ 29,500 $300,000 $2,241,000