Preparation of journal entries for government-wide financial statements and preparation of government-wide financial statements The following additional information is furnished to complete this part of the problem. 1. Croton has no activities other than governmental activities. The city's government-wide statement of net position for the year ended December 31, 2018, showed general capital assets of $14,000 and related accumulated depreciation of $6,400. 2. Depreciation expense on Croton's general capital assets for 2019 (including assets acquired in 2019) was $700, all of which was applicable to public safety. 3. The city's government-wide statement of net position for the year ended December 31, 2018, showed bonds payable of $5,500. All the debt had been issued to finance capital assets. Analysis of Croton's debt service requirements showed that $700 of the total bonds payable as of December 31, 2019, should be reported as current because it is due to be paid during 2020. 4. The city's government-wide statement of net position for the year ended December 31, 2018, showed accrued interest payable of $120 on its outstanding long-term debt. Analysis of the city's debt service requirements showed accrued interest payable of $135 on all outstanding long-term debt as of December 31, 2019, including the debt sold by the city during 2019. 5. Croton's government-wide statement of net position for the year ended December 31, 2018, showed accrued vacation pay of $75. Vacation leave records showed that, as of December 31, 2019, accumulated vacation leave had increased to $87, exclusive of the $10 due to be paid to retired police officers early in 2020. (Assume vacation leave applies only to the public safety function.) Use the preceding information to do the following: a. Prepare journal entries needed to convert the governmental funds financial statements to the governmental activities columns of the government-wide financial statements. Review and make adjustments for journal entries made in Chapter 5 and Chapter 6 portions of this problem for revenues-property taxes; deferred property tax revenue; other financing sources-long-term debt issued; expenditures-capital outlay; expenditures-bond principal; and transfers in and out. Then, record journal entries for 1 through 5 above. Post the journal entries in the six-column worksheet presented below. NOTE: The reference (Ref.) letters next to each journal entry are only provided to help you complete the worksheet that immediately follows. Ref. Description Debit Credit a. Revenues-property taxes 300 0 Net position 0 300 b. To adjust for beginning-of-year deferred revenues recognized as revenue in fund statements. Deferred property tax revenues 400 0 Revenues-property taxes 0 400 To record 2019 property tax revenues on the accrual basis of accounting. C. Other financing source-long-term debt issued 2000 0 Bonds payable 0 2000 To record bonds payable and reduce financing source d. Capital assets 3000 0 Expenditures-construction costs 0 3000 To record capital assets and reduce expenditures e. Bonds payable Expenditures-bond principal To record reduction of bonds payable and reduce expenditures 1300 0 0 1300 650 0 0 650 f. Transfers in Transfers-out To eliminate interfund transfers amoung governmental-type funds g- Capital assets 14000 0 Accumulated depreciation 0 6400 Net position 0 7600 To record beginning of-year balances (see item #1 described above). h. Depreciation expense - public safety Accumulated depreciation 700 0 0 700 To record depreciation expense for 2019 (noted above in item #2). i. Net position 5500 0 Bonds payable 0 5500 To record beginning-of-year balance (see item #3 described above). Net position 120 0 Accrued interest payable 0 120 To record beginning of year balance (see item #4 described above). k. Interest expense 15 0 Accrued interest payable 0 15 To record increase in interest payable over beginning of year balance L Net position 75 0 Accrued vacation pay payable 0 75 To record beginning of year balance (see item #5 described above). m. Expenses-public safety salaries Accrued vacation pay payable 12 20 12 02 To record increase in vacation pay accrual over beginning of year balance Worksheet for government-wide statements (in thousands of dollars) Aggregated Balance Fund Statements Adjustments Adjusted Balance Cash Property taxes receivable-delinquent Personal income taxes receivable Salaries payable Income tax refunds payable Accrued vacation pay payable Debit 1,115 930 700 Allowance for uncollectible taxes-del. 30 700 300 10 Credit Debit Credit Debit Credit 1115 0 930 0 700 0 0 30 0 700 0 300 12 75 L 0 97 12 m. Deferred propety tax revenues 400 b. 400 0 0 Fund balances 1,605 0 1605 Revenues - property taxes 8,880 a. 300 400 b. 0 8980 Revenues - personal income taxes 5,000 0 5000 Revenues-intergovernmental 2,300 0 2300 Revenues-recreation fees 700 0 700 Revenues - miscellaneous 20 0 20 Expenditures - public safety 7,390 m. 12 7402 0 Expenditures - public works 4,950 4950 0 Expenditures - parks 2,300 2300 0 Expenditures-culture 390 390 0 Expenditures-construction costs 3,000 3000 d. 0 0 Expenditures - bond principal 650 650 ai e. 0 0 Expenditures-interest 520 k 15 535 0 Tranfers out 1,300 1300 f. 0 0 Transfers in 1,300 f. 1300 0 0 Other financing source - long-term debt 2,000 c 2000 0 0 $23,245 $23,245 Net position i. 5500 300 a. 0 2205 j- 120 7600 g. L 75 Bonds payable e. 650 2000 C. 0 6850 5500 i. Capital assets d. 3000 17000 0 g- 14000 Accumulated depreciation 6400 g- 0 7100 700 h. Depreciation expense - public safety h. 700 700 0 Accrued interest payable 120 j. 0 135 15 k. 28072 28072 36022 36022 b. Prepare Croton City's government-wide financial statements-a statement of net position and a statement of activities. NOTE: Do not use negative signs with any of your answers below. Croton City Statment of Net Position December 31, 2019 ($ in 000) Governmental Activites Assets Current assets: Cash 1115 Property taxes receivable - delinquent (net) 900 Personal income taxes receivable 700 Total current assets 2715 Noncurrent assets: Capital assets 17000 Less, accumulated depreciation 7100 Total noncurrent assets 9900 Total assets 12615 Liabilities Current Liabilities: Salaries payable 700 Income tax refunds payable 300 Interest payable 135 Vacation pay payable 10 Current portion of bonds payable 700 Total current liabilities 1845 Noncurrent liabilities: Noncurrent portion of bonds payable 6150 Accrued vacation pay 87 Total noncurrent liabilities 6237 Total liabilities 8082 Net position Invested in capital assets, net of related debt 3050 Restricted for intergovernmental grants 235 Unrestricted 1248 4533 Total net position NOTE: Use a negative sign with your answers to indicate a "net expense" in the last column. Croton City Statement of Activites Year Ended December 31, 2019 Program Revenues Charges Functions: Expenses For Service Governmental Activities Public safety Public works Net (Expense) Revenues Operating Grants Capital Grants Changes Net Position 8102 0 1000 1000 -6102 4950 0 0 0 -4950 Parks Culture 2300 700 0 0 -1600 390 20 300 0 -70 Interest on long-term debt 535 0 0 0 -535 Total governmental activities 16277 720 1300 1000 -13257 General revenues: Property taxes Personal income taxes Total revenues Change in net position Net position - beginning of year Net position - end of year 8980 5000 13980 723 3810 4533 c. Prepare Croton's financial statement reconciliations-the funds balance sheet to the government-wide statement of net position and the funds statement of revenues, expenditures, and changes in fund balances to the government-wide statement of activities. NOTE: Use a negative sign with your answer to indicate a reduction in the reconciliation process. Reconciliation of funds balance sheet to government-wide statement of net position ($ in 000) Total fund balance, fund balance sheet Amounts reported in statement of net position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds 0 0 Bonds payable are not due and payable in the current period and therefore are not reported in the funds 0 A portion of the revenues is not available to pay for current period expenditures and therefore is deferred in the funds 0 Certain expenses (interest, vacation pay) are not due and payable in the current period and therefore are not reported as fund liabilities Net position of governmental activities 0 0 NOTE: Use a negative sign with your answer to indicate a reduction in the reconciliation process. Reconciliation of funds statement of revenues, expenditures, and changes in fund balances to government-wide statement of activites ($ in 000) Net change in fund balances Amounts reported in statement of activities are different becasues: Governmental funds report capital outlays as expenditures. In the statement of activities, the costs of capital assets are allocated over their useful lives as depreciation. The amount by which capital outlays in the current period exceeded depreciation is Bond proceeds provide current financial resources and debt repayments areexpenditures in governmental funds. Issuing debt increases liabilities and repaying debt decreases them in the statement of net position. The amountby whichbond proceeds exceeded repayments is Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. This is the amount by which property tax revenues reported in the government-wide statement exceeds the amount reported in the fund statement Some expenses reported in the statement of activities do not require the useofcurrent financial resources and therefore are not reported as expendituresin thegovernmental funds This is the amount by which interest expense and vacationpay reported in the government-wide statement exceeds the amountreported in the funds statement. Change in net posititon of governmental activities. 0 0 0 0 0