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41. (continued)
City of Pfeiffer
Statement of Revenues, Expenditures, and Changes in Fund Balance
Fund Financial Statements – Governmental Funds
Year ending December 31, 2015
Total
General Special Capital Projects Governmental
Fund Revenue Funds Funds Funds
Revenues
-Property Taxes $560,000 -0- -0- $560,000
-Park 8,000 -0- -0- 8,000
-Operating Grant -0- $ 37,000 -0- 37,000
-School Fees 6,000 -0- -0- 6,000
Total Revenues $574,000 $ 37,000 -0- $611,000
Expenditures
-School Bus 102,000 -0- -0- 102,000
-Salaries 270,000 -0- -0- 270,000
-Maintenance 9,000 -0- -0- 9,000
-Interest 9,000 -0- -0- 9,000
-Bond Payment 5,000 -0- -0- 5,000
Sources (Uses)
-Other Financing
Sources -0- -0- 180,000 180,000
-Other Financing
Uses (90 ,000) -0- -0- (90 ,000)
Fund Balance –
Beginning 123,000 -0- -0- 123,000
Fund Balance –
Ending $190,000 -0- $70,000 $260,000
41. (continued)
City of Pfeiffer
Balance Sheet
Fund Financial Statements - Governmental Funds
December 31, 2015
Total
General Special Capital Projects Governmental
Fund Revenue Funds Funds Funds
Assets
-Cash $169,400 $63,000 $70,000 $302,400
-Property Tax
Receivable 90,000 -0- -0- 90,000
-Receivables –
Total Liabilities $ 70,000 $63,000 -0- $133,000
Fund Balances
-Nonspendable $ 5,000 -0- -0- $ 5,000
-Committed -0- -0- $70,000 70,000
-Unassigned 190,000 -0- -0- 190,000
41. (continued)
City of Pfeiffer
Statement of Revenues, Expenses, and Changes in Net Position
Fund Financial Statements—Proprietary Funds
Year Ending December 31, 2015
Enterprise Fund (Civic Auditorium)
Operating Revenues
—Rent Revenues $130,000
Operating Expenses
—Salaries $ 45,000
Operating Income $ 55,000
Non-operating Expenses
Total Net Position—Beginning 662,000
Total Net Position—Ending $724,000
41. (continued)
City of Pfeiffer
Statement of Net Position
Fund Financial Statements—Proprietary Funds
December 31, 2015
Enterprise Fund (Civic Auditorium)
Assets
Current Assets
Noncurrent Assets
—Parking Deck (net) $195,000
—Buildings (net) 580,000
Total Noncurrent Assets $775,000
—Interest Payable 13,000
Total Current Liabilities $ 21,000
Noncurrent Liabilities
—Notes Payable $180,000
Total Liabilities $201,000
42. (17 Minutes) (Impact of various government transactions)
a. False – A pension trust fund is one of the fiduciary funds because the
money cannot be used by city officials for the benefit of the government.
c. True – A commitment of current financial resources was made when this
order was placed. Thus, an encumbrance should have been recognized at
that time. However, the actual amount of the obligation proved to be
liability from $96,000 to $172,000 necessitates an expense of $76,000. Even
though the question relates to the fund financial statements, Enterprise
Funds accrue expenses as incurred in the same way as in government-
wide financial statements.
42. (continued)
g. False – An Agency Fund is used when passing money through the
government to a specified recipient. Thus, the only two accounts typically
interest rate of 10 percent, interest expense of $2,900 should be
recognized in the first year. Total expenses to be reported are $9,400
($6,500 plus $2,900).
43. (12 Minutes) (Recording the gift of a work of art)
a. This gift did not involve a current financial resource and should not have
been recorded in the fund financial statements (for the governmental
b. Apparently, in the government-wide financial statements, revenue of
$15,000 was reported when the asset was recognized at that value.
Depreciation recognized for the first year would have been $500 ($15,000
c. Government officials wanted to use the alternative which was to record an
expense (rather than an asset) along with a revenue for the donation.
However, no entry was made by the art museum. Thus, there was no
44. (8 Minutes) (Recording the lease of a police car)
a. On the government-wide statements, an expense of $20,000 was reported
but no further entry. Instead, an asset and liability of $62,000 should have
been reported. At the end of the year, depreciation on the asset (over a
b. A $62,000 expenditure should have been recorded on the first day of the
year because of the capitalized lease. In addition, a $62,000 “other
financing source” should have also been recorded. The $20,000
45. (5 Minutes) (Reporting a component unit)
The revenue of $30,000 and the expense of $42,000 were not included within
the primary government figures for the government-wide financial
46. (10 Minutes) (Recording a city landfill)
a. Apparently, the amounts recorded this year (in the parks which is within
the General Fund) were in the wrong fund. The landfill should have
continued to be reported as an Enterprise Fund. By itself, that does not
have any net impact on the net position reported for the entire government
position from $140,000 to $124,000.
b. Revenues ($4,000) and expenses ($15,000) for the current year must now
be moved from the General Fund to the Enterprise Funds ($11,000 net
c. Revenues and expenditures have been correctly reported this year within
the General Fund. In addition, there is no indication that the clean-up
47. (6 Minutes) (Recording and depreciating capital assets)
a. The modified approach only applies to infrastructure assets and not to
machines and the like that have a definite life. Thus, $4,000 in
48. (15 Minutes) (Recording leases in government-wide and fund financial
statements)
a. False – Assuming that the next payment is not due until July 1, Year Two, it
is not a claim to current financial resources. Therefore, no liability should
be reported on fund financial statements at the end of Year One.
e. True – The asset is initially capitalized at $78,000. At the end of the first
year, depreciation of $7,800 should be recognized ($78,000 x 1/5 x 6/12)
which reduces the net leased asset to $70,200.
statements, the present value of the future cash flows is recognized as an
expenditure ($78,000) and then the eventual payments are also recognized
as expenditures (five payments of $20,000 each). This total is more than
$100,000 (but the impact is partially offset by the reporting of an other
financing source).
49. (10 Minutes) (Reporting by a government of a solid waste landfill)
a. False – The handling in the government-wide financial statements will be
the same whether the landfill is reported as a part of the General Fund or
as an Enterprise Fund.
f. True – In either case, $2 million will be spent. That will show up as an
expense in the government-wide financial statements and as an
expenditure in the fund financial statements (because the landfill is
reported in the General Fund).
