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.
Williamsburg Regional Sewage Treatment AuthorityStatement of Net Assets
31-Oct-14
ASSETS
Cash / $ 5,772
Time deposits / 16,398
Due on insurance claims / 9,499
Due from participants / 70,889
Total Assets / $ 102,558
LIABILITIES and FUND EQUITY
Accounts payable / $ 17,725
Net Assets
Restricted / 34,833
Unrestricted / 50,000
Total Liabilities and Net Assets / $ 102,558
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?
The unconsolidated information provides more information than the consolidated one. It shows break down of amounts and types of assets available to meet current requirements. Since most of the liquid assets of Williamsburg are restricted , the consolidated statement gives a distorted view of the entity’s true ability to meet its current obligations.
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
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 first payment of principal and $100,000 for its first 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 $ 0
d. $ 972,908 $1,000,000