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 52,000 and the fair value of property totals $970 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 48,894,402 114,584,775 69,042,608 156,218,334 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 18,858,187 58,693,069 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 7 10 Net position Net investment in capital assets Restricted Unrestricted Total net position 23,690,970 30,757,135 54,448,105 6,228,169 14,822,509 25,609,181 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) 2.32 0.11 2.7 times 4 96 imes S 468 4.68 | 96 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 48,894,402 114,584,775 69,042,608 156,218,334 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 18,858,187 58,693,069 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 7 10 Net position Net investment in capital assets Restricted Unrestricted Total net position 23,690,970 30,757,135 54,448,105 6,228,169 14,822,509 25,609,181 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) 2.32 0.11 2.7 times 4 96 imes S 468 4.68 | 96