Advanced Accounting (Looseleaf)
Advanced Accounting (Looseleaf)
12th Edition
ISBN: 9780077632595
Author: Hoyle
Publisher: MCG
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Chapter 17, Problem 39P

a.

To determine

Prepare a statement of activity and statement of net position for governmental activities for city B.

a.

Expert Solution
Check Mark

Explanation of Solution

Statement of activity in the books of city B:

Statement of activities
Program revenueNet revenue and change in net assets
ProgramExpensesCharges for servicesGrants and contributionGovernmental activitiesTotal
Primary Government:     
Governmental  activities:     
General Governmental$180,000$15,000 ($165,000)($165,000)
Public Safety$158,000$8,000 ($150,000)($150,000)
Public Works$159,500$12,000 ($147,500)($147,500)
Health and Sanitation$37,000$31,000$25,000$19,000$19,000
Interest on debt$42,000  ($42,000)($42,000)
Total Governmental     
   Activities$576,500$66,000$25,000($485,500)($485,500)

Table: (1)

Working note:

Computation of closing amount of net assets:

General Revenues: Amount
Property taxes received $ 630,000
Sales Taxes $   99,000
Dividend Income $   20,000
Gain on Sale of Investments   $   14,000
Gain on Investments $     5,000
Total general revenues $ 768,000
  $            -
Change in net assets: $            -
Net assets – beginning $ 120,000
Change $ 282,500
Net assets – ending $ 402,500

Table: (2)

Statement of net position in the books of city P:

Statement of net assets
ParticularsGovernmental activities
  
Assets 
Current Assets: 
  
Cash & Equivalents$139,000
Prepaid insurance$6,000
Investments$116,000
Receivables$120,000
Inventories$6,000
Total Current Assets$387,000
  
Capital Assets: 
Building (Net of depreciation)$240,000
Building (Net of depreciation)$199,500
Equipment (Net of depreciation)$81,000
Truck (Capital Lease)$64,000
  
  
Total Assets$971,500
  
Liabilities: 
   Current Liabilities: 
Wages Payable$36,000
  
   Noncurrent Liabilities: 
Lease Obligation 
    Payable$64,000
Closure Liability 
    Landfill$39,000
Long-term Notes 
Payable$430,000
Total Liabilities$569,000
  
Net assets 
Invested in capital assets, 
net of related debt$154,500
Unrestricted (deficit)$248,000
Total Net Assets$402,500

Table: (2)

b.

To determine

Prepare a statement of revenue, expenditure and change in fund balance and a balance sheet for the city B.

b.

Expert Solution
Check Mark

Explanation of Solution

Statement of activity in the books of city B:

Statement of revenue, expenditure and change in fund balance
Revenues:Amount
Government Funds 
Property taxes received$630,000
Sales taxes$99,000
Dividend income$20,000
Charges for Services$66,000
Grant$25,000
Investments (Realized Gain)$14,000
Investments (Unrealized Gain)$5,000
Total$859,000
Expenditures: 
   Current: 
General Governmental$150,000
Public Safety$149,000
Public Works$122,000
Health and Sanitation$37,000
   Debt Service: 
Principal payment on debt$10,000
Interest on debt$42,000
   Capital Outlay: 
Building$210,000
Equipment$90,000
Truck—leased$64,000
Total expenditures$874,000
Excess (deficiency) of revenues 
   over expenses)($15,000)
  
Other Financing Sources: 
Proceeds from long-term note$200,000
Capitalized lease—truck$64,000
  
Total other financing sources$264,000
  
Net Changes in fund balance$249,000
  
Fund balance—beginning$90,000
  
Less: increase in encumbrances($31,000)
  
Fund balance—ending—unrestricted 
    and unreserved$308,000

Table: (3)

Balance sheet in the books of city B for the year 2015:

Balance sheet for the year ended 31 December 2015
ParticularsAmount
Assets 
Cash and cash equivalents$139,000
Investments$116,000
Receivables, net$120,000
Supplies$6,000
Prepaid Insurance$6,000
  
Total Assets$387,000
  
Liabilities and Fund Balances 
Liabilities: 
Salaries Payable$36,000
  
Fund Balances 
Reserved fund balances 
    Encumbrances 
        Equipment$24,000
        Supplies$7,000
    Supplies$6,000
    Prepaid Insurance$6,000
  
Unrestricted, unreserved$308,000
Total Fund Balance$351,000
  
Total Liabilities and Fund Balance$387,000

Table: (4)

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Chapter 17 Solutions

Advanced Accounting (Looseleaf)

Ch. 17 - Prob. 11QCh. 17 - Prob. 12QCh. 17 - Prob. 13QCh. 17 - What does a comprehensive annual financial report...Ch. 17 - Prob. 15QCh. 17 - Prob. 16QCh. 17 - What is the difference between a blended component...Ch. 17 - Prob. 18QCh. 17 - Prob. 19QCh. 17 - Prob. 20QCh. 17 - Prob. 21QCh. 17 - How are internal service funds reported on...Ch. 17 - Prob. 23QCh. 17 - A general purpose government takes over a special...Ch. 17 - Prob. 25QCh. 17 - Prob. 26QCh. 17 - Prob. 1PCh. 17 - Prob. 2PCh. 17 - Prob. 3PCh. 17 - Prob. 4PCh. 17 - Prob. 5PCh. 17 - A city creates a solid waste landfill. It assesses...Ch. 17 - Prob. 7PCh. 17 - If this landfill is judged to be a proprietary...Ch. 17 - If this landfill is judged to be a governmental...Ch. 17 - The City of Nomanchester has a defined benefit...Ch. 17 - Prob. 11PCh. 17 - Prob. 12PCh. 17 - Prob. 13PCh. 17 - Prob. 14PCh. 17 - A city builds sidewalks throughout its various...Ch. 17 - Prob. 16PCh. 17 - Prob. 17PCh. 17 - Prob. 18PCh. 17 - Prob. 19PCh. 17 - Prob. 20PCh. 17 - Prob. 21PCh. 17 - Prob. 22PCh. 17 - Prob. 23PCh. 17 - Prob. 24PCh. 17 - Prob. 25PCh. 17 - Prob. 26PCh. 17 - Prob. 27PCh. 17 - Prob. 28PCh. 17 - Prob. 29PCh. 17 - Prob. 30PCh. 17 - Prob. 31PCh. 17 - Prob. 32PCh. 17 - Prob. 33PCh. 17 - Prob. 34PCh. 17 - Prob. 35PCh. 17 - The City of Francois, Texas, has begun the process...Ch. 17 - Prob. 37PCh. 17 - Prob. 38PCh. 17 - Prob. 39PCh. 17 - Prob. 40PCh. 17 - Prob. 41PCh. 17 - 42. For each of the following, indicate whether...Ch. 17 - For problems 40 through 43, use the following...Ch. 17 - Prob. 44PCh. 17 - Prob. 45PCh. 17 - Prob. 46PCh. 17 - On the first day of the year, the City of Wolfe...Ch. 17 - Prob. 48PCh. 17 - A city has a solid waste landfill that was filled...Ch. 17 - Use the same information as in problem 44 except...Ch. 17 - Prob. 51PCh. 17 - Prob. 52PCh. 17 - Prob. 53PCh. 17 - Prob. 2DYSCh. 17 - Read the following journal article: 25 Years of...Ch. 17 - Prob. 4DYSCh. 17 - Prob. 5DYSCh. 17 - The City of Larissa recently opened a solid waste...
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