#
Fund or
Nonfund
Accounts Accounts Debit Credit
1a GF Expenditures – Operating 400
#
Fund or
Nonfund
Accounts Accounts Debit Credit
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Governmental and Nonprofit Accounting: Theory and Practice, 10e (Freeman)
Problems – Chapter 13
Problem 1 – Program and General Revenues
The following information was drawn from the records of Wise County (all amounts are in
thousands of dollars).
Local gas tax restricted for street maintenance………………………………………. $13,000
State grant restricted for police training………………………………………………… 4,000
Federal grant for new library…………………………………………….…….…….……. 1,222
Gain on sale of general capital assets …………………………….….…….…….……. 300
License and permit fees ………………………………………………..….…….…….…… 70
Interest collected on investments……………………………………………………….… 108
Fines and forfeitures…………………………………………………………….…….……... 500
Contributions to permanent fund which supports education…..…….…….…… 635
Shared state revenues restricted to public health……………………….….…….…. 1,100
Requirement: Prepare schedules computing amounts to be reported as Charges for Services,
Operating Grants and Contributions, Capital Grants and Contributions, and
General Revenues.
Answers:
Charges for Services:
License and permit fees …………………………………………..….…….…….…… $70
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Problem 2 – Statement of Activities
Presented below is information for the governmental activities for the City of Pleasant Hill for
the year ended December 31, 20X9 (all amounts are in thousands of dollars).
General property taxes revenue……………………………………..….…….…….……. $13,000
Unrestricted grants………………………………………………………………………….…. 4,000
Restricted grants for public safety…………………………………………….…….…… 1,200
Capital grants for highways…………………………………………………….…….……. 300
Increase in fair value of investments………………………………….…….…….……. 70
Interest on investments…………………………………………………..…….…….……... 108
Principal paid on general long-term liabilities……………………..….…….……... 1,100
Interest expense on general long-term liabilities……………………..…….…….… 100
Expenses:
General government……………………………………………………………………… 1,700
Public safety………………………………………………………………………………… 4,200
Highways and streets………………………………………………….….…….…….… 2,100
Health and welfare……………………………………………………………….…….… 3,000
Fees charged for health and welfare programs……………………..…….…….…… 270
Transfer to Enterprise Fund……………………………………………..….…….…….…. 2,500
Collection of interfund advance to Enterprise Fund……………………….…….… 1,000
Proceeds from sale of public safety vehicle (book value of $25)……….…….. 7
Net position, governmental activities, January 1, 20X9……………..….…….…. 3,017
Requirement: Prepare in good form a statement of activities for governmental activities only for
20X9.
Some professors may want to give students a blank sheet of paper to complete this problem.
Another option is the lined and labeled paper available in an Excel file, Ch13P-2. The solution is
in Excel file, Ch13P-2S.
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Problem 3 – Net Position Calculations
NOTE TO ADOPTERS: There are two versions of this problem: 3A, for the City of Floyd,
contains the concept of “unspent proceeds” which is a complex addition to the problem; 3B, for
the City of Raymond, excludes this concept. Choose the version that best fits what you covered
in class.
Problem 3A – Net Position Calculations
The City of Floyd reports the following fund information (all amounts are in thousands of
dollars):
All governmental funds’ fund balance………………………………………….…….… $13,000
Restricted fund balances:
Special Revenue Fund…………………………………………………………………… 1,200
Capital Projects Fund (unspent bond proceeds)………………………………… 900
Debt Service Fund………………………………………………………………………… 1,700
General capital assets…………………………………………………………………..….…. 10,800
Accumulated depreciation on capital assets ……………………….…….…….….… 4,100
General long-term liabilities:
Bonds payable for capital assets…………………………………………..….…….……. 5,700
Liability for compensated absences……………………………………………..…….… 3,200
Internal Service Fund serving governmental activities
Net position…………………………………………………………………………….…… 3,000
Capital assets net of accumulated depreciation……………….…….…….…... 1,700
Liability, capital related………………………………………..…….…….…….……. 500
Requirement: Prepare the net position section for governmental activities for the statement of
net position for the City of Floyd for the year ended December 31, 20X9.
Answer:
Net Investment in Capital Assets
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Restricted Net Position
Net Position
Problem 3B – Net Position Calculations
The City of Raymond reports the following fund information (all amounts are in thousands of
dollars):
All governmental funds’ fund balance………………………………………….…….… $13,000
Restricted fund balances:
Special Revenue Fund…………………………………………………………………… 1,200
Debt Service Fund………………………………………………………………………… 1,700
General capital assets…………………………………………………………………..….…. 10,800
Accumulated depreciation on capital assets ……………………….…….…….….… 4,100
General long-term liabilities:
Bonds payable for capital assets…………………………………………..….…….……. 5,700
Liability for compensated absences……………………………………………..…….… 3,200
Internal Service Fund serving governmental activities
Net position…………………………………………………………………………….…… 3,000
Capital assets net of accumulated depreciation……………….…….…….…... 1,700
Liability, capital related………………………………………..…….…….…….……. 500
Requirement: Prepare the net position section for governmental activities for the statement of
net position for the City of Raymond for the year ended December 31, 20X9.
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Answer:
Net Investment in Capital Assets
Restricted Net Position
Special Projects (Special Revenue Fund)……………………….…….……. $1,200
+ Debt Service (Debt Service Fund)………………………………..…….…….. 1,700
Restricted Net Position………………………………………..…….…….……... $2,900
Unrestricted Net Position
Net Position
Problem 4 – Major Funds
Below is information on total assets for various funds of the City of Dublin (all amounts are in
thousands of dollars).
Fund Assets
General $1,300
Federal Grants Special Revenue 500
State Grants Special Revenue 200
City Hall Capital Projects 900
Debt Service 700
Water and Sewer Enterprise 8,000
Swimming Pool Enterprise 1,000
Fleet Management Internal Service 10,800
Employee Pension Fund 6,500
Requirement: Prepare a schedule computing the threshold for asset amounts that should be used
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to determine which funds must be reported as major. Identify which funds are
major funds.
Answer:
Governmental Funds 10% Test for Assets Amounts Assets
General $1,300
The threshold for determining that a governmental fund other than the General Fund is a major
Major Funds Assets
Governmental and Nonprofit Accounting: Theory and Practice, 10e (Freeman)
Problems – Chapter 14
Problem 1 – Worksheet Adjustments – Two Worksheet Approach
An incomplete operating statement conversion worksheet is provided below [in Excel file
Ch14P-1] for the City of Walden Creek for FY 20X7.
Additional information:
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1. Depreciation Expense for the year was:
a. Buildings………………………………………………………………….…….… 10,000
b. Equipment……………………………………………………………….….……. 6,000
c. Vehicles…………………………………………………………………..…….…. 4,000
d. Infrastructure…………………………………………………………………..… 15,000
Except for infrastructure, which is charged to the function that maintains it, depreciation
is allocated as follows:
General Government……………………………………………………….…. 40%
Public Safety……………………………………………………………….……. 40%
Streets and Roads………………………………………………………….…… 20%
2. All capital outlay expenditures were capitalized except for $30,000 in asset purchases for
the General Government that did not meet the capitalization threshold.
3. Deferred Revenues were $7,000 at the end of FY 20X6, $10,000 at the end of FY 20X7.
4. Interest Payable at the end of FY 20X6 was $4,000. At the end of FY 20X7 it was
$3,000.
5. The vehicles that were sold had a net book value of $4,500.
6. Long-term compensated absences for the government increased $8,000 during the year.
This increase was allocated to the functions at the same rate as depreciation.
Requirement: Complete the operating statement conversion worksheet.
Answers: See Excel file Ch14P-1S.
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Problem 2 – Worksheet Adjustments – One Worksheet Approach
Selected governmental fund data from the City of Miller’s Cove is presented below (all amounts
are in thousands of dollars):
Expenditures – Capital Outlay……………………………………………………………….…. $3,500
Expenditure – Debt Service – Principal…………………………………………………..…. 200
Expenditure – Debt Service – Interest………………………………………..…….…….…. 200
Other financing sources — proceeds from sale of land…………………………..……. 120
Other financing sources — bonds principal………………………………………………… 1,000
Other financing sources — premium on bonds………………………….…….…….…… 100
Transfers from the General Fund…………………………………………………….….…….. 650
Transfer to the Debt Service Fund…………………………………………………….…….… 650
Transfer to the Enterprise Fund……………………………………………….…….…….…… 250
Revenue – Property Taxes………………………………………………………………………… 1,500
Increase in compensated absences reported as general long-term liabilities....... 23
Additional information:
1. Land sold had a book value of $25.
2. Deferred property taxes were $10 at the beginning of the year. Deferred property taxes at
the end of the year were $12.
3. All of the compensated absence liabilities relate to the education function.
Requirement: Prepare the worksheet adjustments that would be needed to convert the following
governmental fund data to governmental activities data for the government-wide
statements.
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Answers:
# Accounts Debit Credit
1 Equipment 3,500
Expenditures – Capital Outlay – Equipment 3,500
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