Reconciliations required to yield government-wide financial statements from fund financial statements and preparation of financial statements The City of Knox is preparing its government-wide financial statements for the year. Its accountant must prepare a number of journal entries to recognize assets and liabilities previously omitted from the fund financial statements and to recognize revenues and expenses for the year under accrual accounting that were not recognized under the current financial resources measurement focus and the modified accrual basis of accounting used to prepare the Statement of Revenues, Expenditures, and Changes in Fund Balances for its funds. a. Prepare the journal entries for the required reconciliations to recognize the following in the government-wide financial statements (all amounts in $1,0005): 1. Recognize Capital Assets of $968,320 as of the beginning of the year. 2. Record Depreciation Expense of $50,123 for the year and reverse Expenditures of $58,099 for Capital Outlays during the year. 3. Recognize $12,000 of Bonds Payable as of the beginning of the year. 4. Reverse Other Financing Sources of $2,000 and Expenditures-Debt Payments of $500 relating to increases and decreases in the bond liability during the year. 5. Reverse Deferred Revenue of $132,600 as of the beginning of the year. 6. Reverse $6,630 of Deferred Revenue recognized during the year. 7. Recognize Compensated Absences of $18,636 as of the beginning of the year and an increase in that liability of $968 during the year. 8. Recognize $60 of Accrued Interest Payable as of the beginning of the year and an increase in that liability of $40 during the year. 9. Recognize a liability of $26,629 relating to the City's landfill as of the beginning of the year. The estimate for this liability did not change during the year.Journal Entries Ref. Description Debit Credit Capital assets, net V 0 x Net position O V O X 2 Depreciation expense 0 X Capital assets, net W 0 x Expenditures-capital outlay 0 X 3 Net position 0 x Bonds payable W 0 v 0 * 4 Other financing sources # 0 x Bonds payable # W 0 X Expenditures-debt principal payments 0 X 5 Deferred revenues W 0 X Net position O V 0 x Deferred revenues 0 x 0 v Revenues 0 x 7 Net position O X Compensated absence expense 0 x Compensated absences O X Net position 0 X Interest expense 0 X Accrued interest O X 9 Net position 0 x Landfill closure/post-closure care costs 0 Xb. The City of Knox reports the following summary fund financial statements for its General Fund: Statement of Revenues, Expenditures, and Changes in Balance Sheet Fund Balances Cash $242,250 Revenues Receivables Real estate taxes $457,470 Real estate and personal property 12,240 Intergovernmental 83,538 Intergovernmental 126,577 Total revenues 541,008 Total assets $381,067 Expenditures Payables $14,485 General government 78,038 Deferred revenues 139,230 Public safety 52,026 Total liabilities 153,715 Education 312,154 Fund balances Public works 26,013 Assigned 36,270 Human services 52,026 Unassigned 191,082 Debt principal payments 700 Total fund balances 227,352 Debt interest payments 100 Total liabilities and fund balances $381,067 Total expenditures 521,057 Excess (deficiency) of revenues over expenditures 19,951 Other financing sources (uses) Proceeds from bonds 2,000 Total other financing sources (uses) 2,000 Net change in fund balances $21,951 Fund balances at beginning of year 205,401 Fund balances at end of year $227,352Given these fund financial statements and the reconciliations in Part a, prepare the government-wide Statement of Net Position and identify the Revenues, Expenses and Change in Net Position that should be reported in the Statement of Activities for the year. HINT: Use negative signs in the last column when appropriate. Statement of Balance Sheet Debit Credit Net Position Cash $242,250 $ O X Receivables: Real estate & personal property 12,240 0 X Intergovernmental 126,577 O X Capital assets, net of accumulated depreciation 1 0 X 0 X 2 O X Total Assets $381,067 0 X Payables $14,485 0 X Accrued interest 0 * 8 0 * Bond and notes payable 0 * 3 0 X 1,500 4 Compensated advances 0 * 7 0 * Landfill closure/post-closure care costs 0 x 9 0 * Deferred revenues 139,230 5 0 X 6 0 X Total Liabilities $153,715 $ 0 X Fund Balance $227,352 Adjustments: 3 0 X 0 * 1 7 0 X 0 X 5 8 0 X 9 O X Net income adjustments calculated below 0 * Fund balance (adjusted) 0 X Total liabilities and fund balances $381,067 5 O XStatement of Revenues, Expenditures Statement of and Changes in Fund Balances Debit Credit Activities Total revenue $541,008 0 * 6 0 * Total expenditures 521,057 0 X Adjustments: Debt principal payments 0 x 4 O X Depreciation/capital outlay 2 O X 0 x 2 0 * Compensated absences 7 0 X 0 X Interest expense 8 0 x 0 x Total expenses--statement of activities O X Misc. adjustments Proceeds from bonds 2,000 4 O X Excess (Deficiency) of Revenues over Expenditures/Change in Net Position $21,951 $ 0 * $ 0 X 0 X