Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The City of Wolfe has issued its financial statements for Year 4 (assume that the city uses a calendar year). The citys general fund is

The City of Wolfe has issued its financial statements for Year 4 (assume that the city uses a calendar year). The citys general fund is made up of two functions: (1) education and (2) parks. The city also utilizes capital projects funds for ongoing construction and an enterprise fund to account for an art museum. It also has one discretely presented component unit.

The government-wide financial statements indicated the following Year 4 totals:

Education had net expenses of $618,000.

Parks had net expenses of $115,000.

Art museum had net revenues of $65,250.

General revenues were $832,750; the overall increase in net position was $165,000.

The fund financial statements issued for Year 4 indicated the following:

The general fund had an increase of $52,750 in its fund balance.

The capital projects fund had an increase of $57,250 in its fund balance.

The enterprise fund had an increase of $79,500 in its net position.

Officials for Wolfe define available as current financial resources to be paid or collected within 60 days.

On the first day of Year 4, the city receives a painting as a gift that qualifies as a work of art. It has a 30-year life, is worth $37,500, and is being displayed at one of the local parks. The accountant accidentally capitalized and depreciated it although officials had wanted to use the allowed alternative.

Respond to the following questions:

1. According to the information provided above, the general fund reported a $52,750 increase in its fund balance. If city officials had used proper alternatives in this reporting, what would have been the correct change in the fund balance for the general fund for the year?

2. According to the information provided above, the parks reported net expenses of $115,000. If city officials had used proper alternatives in this reporting, what was the correct net expense for parks for the year?

3. Assume the same information except that the art was given to the art museum but not recorded at all. What should have been the overall change in net position for Year 4 on government-wide financial statements, assuming that officials still preferred the allowed alternative?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting And Auditing Standards For Islamic Financial Institutions

Authors: Mohd MaSum Billah

1st Edition

103206353X, 978-1032063539

More Books

Students also viewed these Accounting questions

Question

Comment should this MNE have a global LGBT policy? Why/ why not?

Answered: 1 week ago