Ruppel, W. (2013). Wiley GAAP for Governments 2013 Interpretation and Application of Generally Accepted Accounting

ACCT 410 W2A2 Accounting for Government and Not-for-Profit Organizations 1 Week 2 Assignment 1. Funds can be ''consolidated,'' but only at the risk of lost or misleading information. The following balance sheet was adapted from the nancial statements of the Williamsburg Regional Sewage Treatment Authority (dates have been changed). The transactions of the authority are accounted for in the Following governmental fund types: General fundTo account for all revenues and expenditures not required to be accounted for in other funds. Capital projects fundTo account for and report nancial resources that are restricted, committed, or assigned to expenditure for capital outlays. Such resources are derived principally from other municipal utility districts to which the Williamsburg Regional Sewage Treatment Authority provides certain services. 1. Recast the balance sheets of the two funds into a single consolidated balance sheet (statement of net position). Show separately, however, the restricted and the unrestricted portions of the consolidated net position (not each individual asset and liability). Be sure to eliminate interfund payables and receivables. 2. Which presentation, the unconsolidated or the consolidated, provides more complete information? Explain. Which presentation might be seen as misleading? Why? What, if any, advantages do you see in this presentation even though it might be less complete and more misleading? Williamsburg Regional Sewage Treatment Authority Balance Sheet October 31, 2014 Capital General Projects $ 751 $ 5,021 Assets Cash Time deposits Due on insurance claim Due from general fund 16,398 9,499 9,000 ACCT 410 W2A2 Accounting for Government and Not-for-Profit Organizations Due from participants Total assets 66,475 4,414 $76,725 2 $34,833 Liabilities and fund equity Accounts payable $17,725 Due to capital projects fund 9,000 $26,725 Fund balance 50,000 34,833 Total liabilities and fund equity $76,725 $34,833 2. The city of Alpine incurred the following costs during the year in its property tax collection department: Purchase of computer equipment $ 10,000 Salaries and wages $400,000 Purchase of electricity from the city-owned electric utility $ 40,000 Purchase of supplies, all of which were used during the year $ 10,000 As a consequence of these transactions, the amount that Alpine should report as expenditures in its general fund is a. $400,000 b. $410,000 c. $450,000 d. $460,000 3. Grove City received the following resources during the year: Property taxes $50,000,000 A federal grant to acquire police cars $ 400,000 Hotel taxes, which must be used to promote tourism $ 3,000,000 Proceeds of bonds issued to improve the city's electric utility $12,000,000 The amount that the city should most likely report as revenues in its special revenue funds is ACCT 410 W2A2 Accounting for Government and Not-for-Profit Organizations 3 a. $400,000 b. $3,000,000 c. $3,400,000 d. $15,400,000 e. $65,400,000 4. A city issues $20 million of general obligation bonds to improve its streets and roads. In accordance with the bond covenants it committed $1 million to help ensure that it is able to meet its rst payment of principal and $100,000 for its rst payment of interest. The amount of liability that the city should report in its debt service fund is a. $0 b. $18.9 m c. $19 million d. $20 million 5. A government issues $1 million in 30-year, 6 percent coupon bonds at a discount of $27,092. The bonds were sold to yield 6.2 percent. At what amount would the bonds be reported (net) in the government-wide statement of net position and governmental fund balance sheet immediately upon issuance? Government-Wide Fund a. $1,000,000 $1,000,000 b. $ 972,908 $ 972,908 c. $ 972,908 $ d. $ 972,908 $1,000,000 0