36. (12 Minutes) (The reporting of a special purpose government and a
component unit)
a. The major criterion for inclusion in a government’s comprehensive annual
financial report (CAFR) is financial accountability.
b. An activity is viewed as a special purpose government if it meets the
following criteria:
c. Legal separation is usually demonstrated by having corporate powers such
d. The fiscal independence of a government is indicated by having authority
to do specific actions:
government
36. (continued)
e. A component unit is any activity that is legally separate from a primary
government but so closely tied to that government that some inclusion in
the government’s CAFR is necessary. The account balances of the
f. One of the criteria for identifying a component unit includes the primary
government’s ability to impose its will on the component unit. A primary
g. Normally, as indicated above, the financial position and operations of a
component unit are shown separately from the primary government.
37. (15 Minutes) (Journal entries for an enterprise fund)
1/1/15 Cash 160,000
Capital Contributions 160,000
Cash 12,000
7/1/15 Accounts Receivable 13,000
Revenues–Services 13,000
Cash 11,000
9/1/15 Salaries Expense 18,000
Cash 18,000
Unearned Revenue 18,000
Revenue–Grant 18,000
10/1/15 Maintenance Expense 1,000
12/31/15 Accounts Receivable 19,000
Revenues–Services 19,000
Cash 3,000
Accounts Receivable 3,000
ADJUSTING ENTRIES
12/31/15 Interest Expense
a. CITY OF WILLIAMSON
STATEMENT OF ACTIVITIES
For Year Ended December 31, 2015
Net (Expense) Revenue and
Program Revenues Changes in Net Position
Operating Capital
Charges for Grants and Grants and Governmental Business-type
Functions/Programs Expenses Services Contributions Contributions Activities Activities Total
General Revenues:
Property taxes $401,000
$401,000
Franchise taxes 42,000
42,000
Investments (gain) 13,000 13,000
Total general revenues $456,000 $456,000
Change in net position 195,000 195,000
Net position—beginning 0 0
38. a. (continued)
Computations:
General Governmental [$66,000 + 11,000 + 21,000 + 8,000 + 4,000 (salaries
payable) + 13,000 (compensated absences) + 14,000 (art work) + 12,000
CITY OF WILLIAMSON
STATEMENT OF NET POSITION
December 31, 2015
Governmental Business-type
Activities Activities Total
Assets
Capital assets (net) 172,000 172,000
Total assets 423,000 $423,000
Liabilities
Salaries payable 19,000 19,000
Invested in capital assets,
net of related debt (24,000) (24,000)
Unrestricted (deficit) 219 ,000 219 ,000
Total net position $195,000 $195,000
38. (continued)
b.
CITY OF WILLIAMSON
STATEMENT OF REVENUES, EXPENDITURES, AND OTHER CHANGES IN
FUND BALANCES
Governmental Funds
For Year Ended December 31, 2015
Revenues: General Fund Total Government Funds
Property Taxes $401,000 $401,000
Franchise Taxes 42,000 42,000
Charges for Services 50,000 50,000
Investments (Gain) 13,000 13,000
Capital outlay 200,000 200,000
Total expenditures $474,000 $474,000
Excess (Deficiency) of
Revenues over Expenses 32,000 32,000
Other Financing Sources:
38. b. (continued)
CITY OF WILLIAMSON
BALANCE SHEET
Governmental Funds
December 31, 2015
Total
General Fund Governmental Funds
Assets
Cash and cash equivalents $ 62,000 $ 62,000
—Unassigned 215,000 215,000
Total Fund Balances 232,000 232,000
Total Liabilities
and Fund Balances $251,000 $251,000
39. (70 Minutes) (Prepare financial statements for government-wide financial statements and fund financial
statements)
a. CITY OF BERNARD
STATEMENT OF ACTIVITIES
For Year Ended December 31, 2015
Net (Expense) Revenue and
Program Revenues Changes in Net Position
Charges for Grants and Governmental
Functions/Programs Expenses Services Contributions Activities Total
Gain on Value of Investments 5,000 5,000
Total general revenues $768,000 $768,000
Change in net position:
Change during 2015 $ 282,500 $ 282,500
Net position—beginning 120,000 120,000
Net position—ending $402,500 $402,500
39. a. (continued)
Computations:
General Governmental [$90,000 + 9,000 + 25,000 + 12,000 + 14,000 (salaries
payable) + 30,000 depreciation] = $180,000
Public Safety [$94,000 + 16,000 + 12,000 + 10,000 + 17,000 (salaries
Landfill [260,000 x 15%] = $39,000
CITY OF BERNARD
STATEMENT OF NET POSITION
December 31, 2015
Governmental
Activities Totals
Assets
Current Assets:
Cash and Cash
Equivalents $139,000 $139,000
Prepaid Insurance 6,000 6,000
Total Current Assets 387,000 387,000
Capital Assets:
Building-General Government
(net of depreciation) $240,000 $240,000
Building-Public Works
(net of depreciation) 199,500 199,500
39a. (continued)
Liabilities
Current Liabilities:
Salaries Payable $36,000 $36,000
Noncurrent Liabilities:
Net Position
Invested in Capital Assets,
39. (continued)
b.
CITY OF BERNARD
STATEMENT OF REVENUES, EXPENDITURES, AND OTHER CHANGES
IN FUND BALANCES – Governmental Funds
For Year Ended December 31, 2015
General Fund
Revenues:
Property taxes $630,000
Grant 25,000
Investments (realized gain) 14,000
Investments (unrealized gain) 5,000
Total $859,000
Health and sanitation 37,000
Debt Service:
Principal payment on debt 10,000
Interest on debt 42,000
Capital Outlay:
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
39. b. (continued)
*The fund balance shown here is $339,000. Of that amount, $31,000 is committed
for the encumbrances for supplies and equipment. Another $3,000 is restricted