Requirement 9-d
City Hall Annex Total
General Construction Debt Service Governmental
Fund Fund Fund Funds
Revenues
Taxes—real property 6,600,000$ 700,000$ 7,300,000$
Taxes—sales 748,000 748,000
Expenditures
General government 1,707,316$ 1,707,316
Public safety 3,457,294 3,457,294
Public works 1,712,781
1,712,781
Other Financing Sources (Uses) –
Premium on bonds 75,000 75,000
Proceeds of bonds 7,500,000 7,500,000
City of Bingham
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended December 31, 2017
Requirement 9-d
Net changes in fund balances—total governmental funds 561,782$
Amounts reported for the governmental activities in the
statement of activities are different because:
Governmental funds report capital outlay as expenditures.
City of Bingham
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds
to the Government-wide Statement of Activities
For the Year Ended December 31, 2017
Requirement 9-d
Water Utility
Fund
Totals
Assets
Current assets:
Cash 664,821$
Customer accounts receivable (net) 243,414
Due from other funds 50,000
Inventory of supplies 161,060
Total Current Assets 1,119,295
Utility plant in service (net) 16,950,709
Internal Service
Funds
City of Bingham
Statement of Net Position
Proprietary Funds
As of December 31, 2014
Business-type Activities
Governmental
Requirement 9-d
Water Utility
Fund
Totals
Operating Revenue
Sales of water (net of $4,328 provision 3,122,172$
for doubtful accounts)
Operating Expenses
Operation 942,404
Maintenance 287,400
Depreciation expense 440,064
Total operating expenses 1,669,868
Operating Income 1,452,304
Non-operating Expenses
Internal Service
Funds
City of Bingham
Statement of Revenue, Expenses, and Changes in Net Position
Proprietary funds
For the Year Ended December 31, 2014
Business-type Activities
Governmental
Requirement 9-d
Water Utility
Fund
Totals
Cash flows from operating activities:
Cash received from customers 3,014,754$
Cash paid to employees for services (840,650)
Cash paid to vendors for supplies (343,600)
Net cash provided by operating activities 1,830,504
Cash flows from capital and related financing
activities:
Construction of utility plant (753,500)
Interest paid on long-term bonds (923,020)
Net cash used in capital and related financing activities: (1,676,520)
Net increase in cash and cash equivalents 153,984
Cash and cash equivalents, January 1 576,315
Cash and cash equivalents, December 31 730,299$
Operating Income 1,452,304$
Adjustments:
Depreciation expense 440,064
Increase in net accounts receivable (72,122)
Increase in due from other funds (35,700)
Increase in inventories (57,500)
Increase in vouchers payable 100,900
Increase in customer deposits 2,558
Net Cash Provided by Operating Activities 1,830,504$
Internal Service
Funds
Reconciliation of Operating Income to Net Cash Provided
City of Bingham
Statement of Cash Flows
Proprietary Funds
For the Year Ended December 31, 2014
Business-type Activities
Governmental
Indicator (Ill. 10-3) Formula Source Values Calculation
Revenue Measures:
General Fund intergovernmental revenues General fund financial statements 510,000$
Total General Fund revenues General fund financial statements 9,524,580$
Operating Position Measures:
Total operating revenues GF financial statements 10,233,160$
Total operating expenditures* GF financial statements 9,680,878$
General Fund operating surplus/deficit* General fund financial statements 656,202$
General Fund operating revenues General fund financial statements 9,524,580$
General Fund balances General fund financial statements 701,877$
General Fund operating revenues General fund financial statements 9,524,580$
Cash and short-term investments GF financial statements 1,875,622$
Current liabilities GF financial statements 696,240$
Debt Indicators:
Assessed valuation Provided in chapter 6 of problem 450,000,000$
Current liabilities GF financial statements 696,240$
Operating revenues GF financial statements 10,233,160$
Principal and interest payment on debt Debt service fund financial statements 812,500$
General Fund operating revenue General fund financial statements 9,524,580$
Performance Measure (Ill. 10-4)
Financial Position:
Unrestricted net position GW financial statements 701,877$
Total governmental activities revenue GW financial statements 10,270,660$
Total governmental activities liabilities GW financial statements 17,874,990$
Governmental activities current liabilities GW financial statements 1,731,240$
7)
8)
9)
Chapter 10 – Ratio Analysis
1)
2)
3)
Intergovernmental revenues
Revenues over expenditures
Operating surplus/deficit
0.054
1.057
0.069
0.068
0.085
0.068
Current liabilities
Debt service
Unrestricted net position
Financial Performance:
Net governmental activities revenues GW financial statements 10,270,660$
GO bonded debt GW financial statements 17,068,750$
Population Provided in problem 50,000
GO bonded debt GW financial statements 17,068,750$
Legal debt limit Calculated in chapter 6 of problem 20,017,720$
GO = general obligation
GW = government-wide
GF – governmental funds
*recall the equipment purchase in chapter 4
14)
0.853
Available legal debt limit
Interpretation of Ratios
(Note to Instructor – It is not expected that your students would need to prepare all of the
following ratios.)
1) At 5.4% of total revenues, it does not appear that intergovernmental revenues constitute a
2) This ratio, while slightly greater than one (1.057), is considered to be about average (1.0 is
6) With a ratio of .038, Bingham’s long-term debt ratio is well below the ratio of .10 that would
7) Bingham’s current liabilities ratio of .068 warrants monitoring. A ratio of .05 is considered a
warning sign. As a result, this is a ratio Bingham will want to watch closely.
11) The current ratio for Bingham is 1.395, indicating a stable financial position ratio; however,
12) The interperiod equity ratio of 0.813 is less than one, indicating that approximately 81% of
13) The bonded debt per capita is $341.38. Without additional information about the population
demographics, such as unemployment, average salaries, overlapping debt and taxes per
14) At a ratio of .853, a large percentage of the available legal debt limit has been used.
Overall the City of Bingham seems to be in an acceptable financial position. The ratios indicate
that the city will be able to cover its obligations in the short term. The financial condition of the
Chapter 11
An unmodified auditor’s report, similar to that shown in Illustration 11-1, appears to be
appropriate for the City of Bingham for the year ended December 31, 2017. Nevertheless, some
Report on the Financial Statements
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion
and analysis on pages XX–XX be presented to supplement the basic financial statements. Such information,
although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board
Additional explanatory sentences may be required if the audit is performed in accordance with
Government Auditing Standards. For the purposes of the audit report, it was assumed that at a
minimum a required management’s discussion and analysis was prepared. It is known that a
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