Reiver County has an Internal Service Fund (ISF) that operates a motor pool for various county agencies, all of which receive appropriations from the General Fund. The amounts billed by the ISF during 2012 were: General government programs - $60,000; Public safety programs - $10,000; and Social services programs - $30,000. These amounts are included in the total expenditures reported in the fund financial statements for each program.

Following is a condensed ISF operating statement:

Charges for services $120,000

Operating expenses 80,000

Operating income 40,000

Nonoperating expenses 10,000

Change in net position 30,000

Net position, beginning of period 180,000

Net position, end of period $210,000

Required:

a. Calculate how much Regina County should report as motor pool transportation expenses for each of its programs in its 2012 government-wide statement of activities.

b. Assume the ISF assets are: Cash of $20,000; and Capital assets, net of depreciation, of $180,000. Describe how the ISF assets are brought into the government-wide financial statements.

Solutions:

a. Intragovernmental "profit" percentage included in ISF billings (calculate):

Governmental program expenses after reduction for intragovernmental profit:

		Expenditures Fund-level Statement		Reduction		Expenses Government-wide statement
General Government
Public Safety
Social service
Totals

b.