Presented below are the computed amounts of ratios for the Village of Riverside example appearing in the chapter.

Required: a$.$ Using the financial statements provided in Illustrations $2-5$ through $2-11,$ compute ratios for the City of Salem. a$)$ Assume the population of Salem is $110,000$ and the fair value of property totals $$995$ million.

b$)$ For each ratio, indicate which of the two governments has a stronger financial position. $($Round "Debt per Capita" answer to the nearest whole dollar and other answers to $2$ decimal places.$)$

Overview of Financial Reporting for State and Local Governments

$29$

Example Comprehensive Annual Financial Report

Financial Section: Basic Financial Statements

Government$-$wide Financial Statements: Statement of Net Position

ILLUSTRATION $2-5$

Statement of Net Position

CITY OF SALEM

Statement of Net Position

As of December $31,2017$

Primary Government

Primary

Government

Governmental Business$-$type

Component

Units

Activities

Activities

Assets

Cash and cash equivalents $ $8,242,998$ $ $4,814,724$ $$13,057,722$ $ $84,733$

Inventory

$3,312,992$

$1,072,963$

$10,350,334$

$30,779$

$13,663,326$

$1,103,742$

Receivables $($net$)$

$2,872,611$

$722,215$

$2,872,611$

$3,379,541$

Taxes receivable

Accounts receivable

$2,657,326$

$27,085$

Due from other

governments

$1,328,448$

$3,933,126$

$1,328,448$

$6,228,169$

Restricted assets

$2,295,043$

Capital assets $($net of

accumulated depreciation$)$

$65,690,373$

$87,175,726$

$48,894,402114,584,775$

$69,042,608156,218,334$

$11,170,900$

$11,282,718$

Total assets

Liabilities

Accounts payable

Accrued liabilities

Bonds payable due

$2,425,447$

$493,849$

$473,168$

$2,919,296$

$4,340,108$

$2,164,521$

$39,834,882$

$4,813,276$

$3,507,238$

$18,858,18758,693,069$

within one year

Bonds payable due

$1,342,717$

in more than one year

Total liabilities

$48,764,958$

$21,167,921$

$69,932,879$

$710$

Net position

Net investment in

capital assets

Restricted

Unrestricted

Total net position

$23,690,97030,757,13554,448,105$

$6,228,169$

$14,822,50925,609,181$

$11,197,985$

$3,933,126$

$10,786,672$

$2,295,043$

$84,023$

$$38,410,768$ $$47,874,687$ $$86,285,455$ $$11,282,008$Village of Riverside City of Salem

Stronger Ratio

$151\%$

$111\%$

$(1)$ Financial Position $($government$-$wide, governmental activities$)$

$(2)$ Financial Position $($General Fund$)$

$(3)$ Quick Ratio $($government$-$wide, governmental activities$)$

$4)$ Leverage $($government$-$wide, primary government$)$

$(5)$ Debt Service Coverage $($enterprise funds$)$

$(8)$ Debt Service to Total Expenditures $($governmental fund$-$basis$)$

$(7)$ Debt per Capita $($government$-$wide, primary government$)$

$(8)$ Debt to Assessed Value of Property $($government$-$wide, primary government$)$

$2\mathrm{.}32$

$0\mathrm{.}11$

$2\mathrm{.}7$ times

$496$

imes

S $468$

$4\mathrm{.}68|96$