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ILLUSTRATION 17-2 UNITED STATES GOVERNMENT Balance Sheets As of September 30, 2019, and 2018 (In billions of dollars) 2019 Restated 2018 Assets: 524.6 5075 Cash and other monetary assets Accounts and taxes receivable, net 238 0 1449 Loans receivable, net 1,425.8 1.419.1 Inventories and related property, net 3557 337,5 Property, plant and equipment, net 1,1069 1.090.5 Debt and equity securities 118.3 1122 evate linde 112.1 Go to Settings to 113.2 Investments in government-sponsored enterprises Other assets 1106 1118 Total assets 3.992.0 3,8367 98.0 86.7 Stewardship land and heritage assets Liabilities: Accounts payable Federal debt securities held by the public and accrued interest Federal employee and veteran benefits payable Environmental and disposal liabilities 16,861.0 15,812,7 8,440.3 7,982.3 595.4 577.3 Benefits cue and payable 2236 2111 Insurance and guarantee program liabilities 194.5 1702 Loan guarantee liabilities 217 38.2 Other liabilities 5103 4789 Activate Window 26.944.8 Go to Setting 25.3574 Total liabilities Contingencies and commitments Net Position: Funds from Dedicated Collections 3.5171 3,480.7 Funds other than those from Dedicated Collections (26 469 9 (25 0014 Total net position (22.9528 215207 Total liabilities and net position 3,992.0 3,836.7 LLUSTRATION 17-3 UNITED STATES GOVERNMENT Statement of Operations and Changes in Net Position For the Year Ended September 30, 2019 (In billions of dollars) Funds other than those from Dedicated Collections (Combined) Funds from Dedicated Collections Combined) Eliminations Consolidated Revenue: Individual income tax and tax withholdings 1,687.6 1.218.6 - 2.9062 Corporation income taxes 322.5 - 322.5 Excise taxes 42.1 60.7 - 102.8 Unemployment taxes 39.4 39.4 Customs duties 72.6 0.1 - 72.7 Estate and gift taxes 16.7 16.7 Activale Window Go to Setings 1453 Other taxes and receipts 102.4 42.9 Miscellaneous earned revenues 12.0 3.4 - 15.4 intragovernmental interest 95.5 1955) Total revenue _2.255.9 1.460.6 195.5 _36210 Net Cost of Government Operations: Net cost 3,237.5 1,830.2 5,067.7 intragovernmental interest 95.5 195.5 Total net cost 3.3330 18302 195.5 5.0677 (406.0) 406.0 Intragovernmental transfers Unmatched transactions and balances 16 = 16 (1.4815 | 364 36.4 (1.445.1) (25,001.4) 3,480.7 Net operating (cost revenue Net position, beginning of period Adjustments to beginning net position Activate 121,520.79 W! Go to Setings to activ 13.0 13.0 Net operating (cost/revenue (1,481.5) 36.4 (1,445.1) Net position, end of period (26,469.9) 3,5171 (22,952.8) L The complexity and uniqueness of the federal government make it difficult to conduct a meaningful analysis of its financial condition. However, conducting a financial statement analysis does provide a better understanding of the federal government. To assist in the financial statement analysis, use Illustration 17-2 and Illustration 173 along with the following excerpts from the 2019 Financial Report of the United States Government. (Hint: When using revenues or net costs, use the consolidated amounts, which are adjusted for Intra- entity activity.) UNITED STATES GOVERNMENT Statements of Changes in Cash Balance from Budget and Other Activities For the Years Ended September 30, 2019, and 2018 (In billions of dollars) Reclass 2018 2019 3,462.2 (4,446.6) (984.4) 3, 328.7 (4,107.7) (779.) 305.5 65.7 (33.3) 268.5 41.9 1.1 337.9 311.5 7.1 (43.2) (22.8) 47.7 7.9 (42.1) (37.3) 35.8 (11.2) (35.7) 326.7 275.8 Cash flow from budget activities Total budget receipts Total budget outlays Budget deficit Adjustments for non-cash outlays included in the budget Non-cash flow amounts in the budget related to federal debt securities Accrued interest Net amortization Other Subtotal - adjustments for non-cash flow amounts in the budget related to federal debt securities Non-cash flow amounts in the budget related to loan financing account activity Interest revenue on uninvested funds Interest expense on entity borrowings Entities' downward reestimatesegative subsidy payments Entities' subsidy expense/upward reestimates Subtotal - adjustments for non-cash flow amounts in the budget related to Loan financing account activity Total of adjustments for non-cash out Lays included in the budget Cash flow from activities not included in the budget Cash flow from non-budget activities related to federal debt securities Interest paid Subtotal - cash flow from non-budget activities related to federal debt securities Cash flow from non-budget activities related to loan financing account activity Loan disbursements/default payments Fees Principal & interest repayments other collections on defaulted loans receivable and sale of foreclosed property Other loan financing account activities Subtotal - cash flow from non-budget activities related to Loan financing account activity Cash flow from financing federal debt securities Borrowings Repayments Discount/premium Subtotal - cash flow from financing federal debt securities Total cash flow from activities not included in the budget Other Total other Change in cash and other monetary assets balance Beginning cash and other monetary assets balance Ending cash and other monetary assets balance (305.7) (305.7) (260.4) (260.4) (214.3) 24.5 125.9 4.5 (194.9) 25. 117.7 5.7 0.6 (45.9) (59.4) 11,813.4 (10,732.1) (60.4) 1,020.9 655.8 10,080.1 (8,993.5) (54.7) 1,031.9 725.6 19. 17.1 507.5 13.9 236.3 271.2 507.5 524.6 Net Cost Net Buildings, structures, and facilities Furniture, fixtures, and equipment Construction in progress Internal use software Land Other property, plant, and equipment Total property, plant, and equipment Property, plant, and Equipment, Net As of September 30, 2019, and 2018 (In billions of dollars) Accumulated Depreciation/ Cost Amortization 2019 775.8 469.7 1,387.5 899.5 171.6 N/A 51.5 32.1 21.7 N/A 31.7 21.6 2,439.8 1,332.9 306.1 578. 171.6 19.4 21.7 10.1 728.4 1,363.9 159.5 49.4 21.5 38.0 2,360.7 Accumulated Depreciation/ Amortization 2018 431.1 782.7 N/A 30.8 N/A 25.6 1,270.2 297.3 581.2 159.5 18.6 21.5 12.4 1,090.5 1,106.9 Required a. To provide an indication of the government's financial capability, answer the following: (1) What percentage of total revenues comes from Individual income taxes and withholdings? (2) What is the debt service as calculated by the ratio of principal and Interest payments on debt held by the public to total revenue? b. To provide an Indication of the government's financial performance, answer the following: (1) What is Interperiod equity, as calculated by the ratio of revenue to net costs? c. To provide an Indication of the government's financial position, answer the following: (1) What is the ratio of nondedicated collections funds to total revenue? (2) What is the quick ratio (use known current liabilities in the calculation)? (3) What is the capital asset condition as calculated by the ratio of accumulated depreciation to the cost of depreciable capital assets? ILLUSTRATION 17-2 UNITED STATES GOVERNMENT Balance Sheets As of September 30, 2019, and 2018 (In billions of dollars) 2019 Restated 2018 Assets: 524.6 5075 Cash and other monetary assets Accounts and taxes receivable, net 238 0 1449 Loans receivable, net 1,425.8 1.419.1 Inventories and related property, net 3557 337,5 Property, plant and equipment, net 1,1069 1.090.5 Debt and equity securities 118.3 1122 evate linde 112.1 Go to Settings to 113.2 Investments in government-sponsored enterprises Other assets 1106 1118 Total assets 3.992.0 3,8367 98.0 86.7 Stewardship land and heritage assets Liabilities: Accounts payable Federal debt securities held by the public and accrued interest Federal employee and veteran benefits payable Environmental and disposal liabilities 16,861.0 15,812,7 8,440.3 7,982.3 595.4 577.3 Benefits cue and payable 2236 2111 Insurance and guarantee program liabilities 194.5 1702 Loan guarantee liabilities 217 38.2 Other liabilities 5103 4789 Activate Window 26.944.8 Go to Setting 25.3574 Total liabilities Contingencies and commitments Net Position: Funds from Dedicated Collections 3.5171 3,480.7 Funds other than those from Dedicated Collections (26 469 9 (25 0014 Total net position (22.9528 215207 Total liabilities and net position 3,992.0 3,836.7 LLUSTRATION 17-3 UNITED STATES GOVERNMENT Statement of Operations and Changes in Net Position For the Year Ended September 30, 2019 (In billions of dollars) Funds other than those from Dedicated Collections (Combined) Funds from Dedicated Collections Combined) Eliminations Consolidated Revenue: Individual income tax and tax withholdings 1,687.6 1.218.6 - 2.9062 Corporation income taxes 322.5 - 322.5 Excise taxes 42.1 60.7 - 102.8 Unemployment taxes 39.4 39.4 Customs duties 72.6 0.1 - 72.7 Estate and gift taxes 16.7 16.7 Activale Window Go to Setings 1453 Other taxes and receipts 102.4 42.9 Miscellaneous earned revenues 12.0 3.4 - 15.4 intragovernmental interest 95.5 1955) Total revenue _2.255.9 1.460.6 195.5 _36210 Net Cost of Government Operations: Net cost 3,237.5 1,830.2 5,067.7 intragovernmental interest 95.5 195.5 Total net cost 3.3330 18302 195.5 5.0677 (406.0) 406.0 Intragovernmental transfers Unmatched transactions and balances 16 = 16 (1.4815 | 364 36.4 (1.445.1) (25,001.4) 3,480.7 Net operating (cost revenue Net position, beginning of period Adjustments to beginning net position Activate 121,520.79 W! Go to Setings to activ 13.0 13.0 Net operating (cost/revenue (1,481.5) 36.4 (1,445.1) Net position, end of period (26,469.9) 3,5171 (22,952.8) L The complexity and uniqueness of the federal government make it difficult to conduct a meaningful analysis of its financial condition. However, conducting a financial statement analysis does provide a better understanding of the federal government. To assist in the financial statement analysis, use Illustration 17-2 and Illustration 173 along with the following excerpts from the 2019 Financial Report of the United States Government. (Hint: When using revenues or net costs, use the consolidated amounts, which are adjusted for Intra- entity activity.) UNITED STATES GOVERNMENT Statements of Changes in Cash Balance from Budget and Other Activities For the Years Ended September 30, 2019, and 2018 (In billions of dollars) Reclass 2018 2019 3,462.2 (4,446.6) (984.4) 3, 328.7 (4,107.7) (779.) 305.5 65.7 (33.3) 268.5 41.9 1.1 337.9 311.5 7.1 (43.2) (22.8) 47.7 7.9 (42.1) (37.3) 35.8 (11.2) (35.7) 326.7 275.8 Cash flow from budget activities Total budget receipts Total budget outlays Budget deficit Adjustments for non-cash outlays included in the budget Non-cash flow amounts in the budget related to federal debt securities Accrued interest Net amortization Other Subtotal - adjustments for non-cash flow amounts in the budget related to federal debt securities Non-cash flow amounts in the budget related to loan financing account activity Interest revenue on uninvested funds Interest expense on entity borrowings Entities' downward reestimatesegative subsidy payments Entities' subsidy expense/upward reestimates Subtotal - adjustments for non-cash flow amounts in the budget related to Loan financing account activity Total of adjustments for non-cash out Lays included in the budget Cash flow from activities not included in the budget Cash flow from non-budget activities related to federal debt securities Interest paid Subtotal - cash flow from non-budget activities related to federal debt securities Cash flow from non-budget activities related to loan financing account activity Loan disbursements/default payments Fees Principal & interest repayments other collections on defaulted loans receivable and sale of foreclosed property Other loan financing account activities Subtotal - cash flow from non-budget activities related to Loan financing account activity Cash flow from financing federal debt securities Borrowings Repayments Discount/premium Subtotal - cash flow from financing federal debt securities Total cash flow from activities not included in the budget Other Total other Change in cash and other monetary assets balance Beginning cash and other monetary assets balance Ending cash and other monetary assets balance (305.7) (305.7) (260.4) (260.4) (214.3) 24.5 125.9 4.5 (194.9) 25. 117.7 5.7 0.6 (45.9) (59.4) 11,813.4 (10,732.1) (60.4) 1,020.9 655.8 10,080.1 (8,993.5) (54.7) 1,031.9 725.6 19. 17.1 507.5 13.9 236.3 271.2 507.5 524.6 Net Cost Net Buildings, structures, and facilities Furniture, fixtures, and equipment Construction in progress Internal use software Land Other property, plant, and equipment Total property, plant, and equipment Property, plant, and Equipment, Net As of September 30, 2019, and 2018 (In billions of dollars) Accumulated Depreciation/ Cost Amortization 2019 775.8 469.7 1,387.5 899.5 171.6 N/A 51.5 32.1 21.7 N/A 31.7 21.6 2,439.8 1,332.9 306.1 578. 171.6 19.4 21.7 10.1 728.4 1,363.9 159.5 49.4 21.5 38.0 2,360.7 Accumulated Depreciation/ Amortization 2018 431.1 782.7 N/A 30.8 N/A 25.6 1,270.2 297.3 581.2 159.5 18.6 21.5 12.4 1,090.5 1,106.9 Required a. To provide an indication of the government's financial capability, answer the following: (1) What percentage of total revenues comes from Individual income taxes and withholdings? (2) What is the debt service as calculated by the ratio of principal and Interest payments on debt held by the public to total revenue? b. To provide an Indication of the government's financial performance, answer the following: (1) What is Interperiod equity, as calculated by the ratio of revenue to net costs? c. To provide an Indication of the government's financial position, answer the following: (1) What is the ratio of nondedicated collections funds to total revenue? (2) What is the quick ratio (use known current liabilities in the calculation)? (3) What is the capital asset condition as calculated by the ratio of accumulated depreciation to the cost of depreciable capital assets
