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Chapter 6 Transactions Affecting General Long-Term Liabilities and
Debt Service
The City of Bingham utilizes a single debt service fund to account for the service of all
issues of tax-supported and special assessment long-term debt. As of December 31, 2016,
one issue of tax-supported serial bonds was outstanding.
The post-closing trial balance of the debt service fund as of December 31, 2016, is shown
below. The issue of tax-supported serial bonds issued on October 1, 2016 and outstanding
on December 31, 2016, amounted to $10,000,000. Bonds of this issue in the amount of
$500,000 mature on September 30 of each year, beginning in 2017. This bond issue bears
interest at the annual rate of 2 percent, payable on March 31 and September 30 each year.
The cash balance of the debt service fund on December 31, 2016, is restricted for the
repayment of tax-supported bond principal and interest payments, such as the principal
maturing on September 30, 2017, and bond interest due in 2017.
a. Record the following accounts and balances in the debt service fund general journal,
selecting 2016 from the [Year] menu and using para. 6-a for the [Transaction
Description]. When completed select [Post Entries] to post the entries in the general
ledgers. (Note: These opening balances were previously recorded in the governmental
activities general journal in Chapter 2 of this project.)
CITY OF BINGHAM
Debt Service Fund
Trial Balance
As of December 31, 2016
Debits Credits
Cash $ 950,000
Taxes Receivable—Delinquent 85,000
Allowance for Uncollectible Delinquent $ 54,000
Taxes
Interest and Penalties Receivable on Taxes 9,600
Allowance for Uncollectible Interest and
Penalties 960
Fund Balance—Restricted 989,640
Totals $1,044,600 $1,044,600
Additional Information:
On January 1, 2017, the City of Bingham sold a 12-year issue of tax-supported serial
bonds to finance the construction and equipping of an annex to City Hall. As described
in Chapter 5 of this cumulative problem, the total amount of bonds issued on that date
was $7,500,000, sold at 101. The issue bears interest at the annual rate of 3 percent,
payable on January 1 and July 1 of each year; bonds in the amount of $375,000 will
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mature on January 1, 2018, and every six months thereafter until maturity. The
premium on these bonds will be amortized using the straight-line method over 24
periods. Cash for the payment of interest in 2017 will be provided by the General Fund
(see Chapter 4).
Before closing the City of Bingham, click on [File], and [Save/Save As] to save
your work. If you close the file by clicking on the [X] box you will be asked if you
want to save your changes before closing.
Required:
b. Prepare general journal entries, as necessary to record the following transactions in the
debt service fund general journal and, if applicable, in the governmental activities
general journal. Use account titles listed under the drop down [Account (# –
Description)] menu. Be sure the year 2017 is selected from the drop-down [Year]
menu and the appropriate paragraph number shown in bold-face font below is in the
[Transaction Description] box.
1. [Para. 6-b-1] From the data given about the bond issue already outstanding on
January 1, 2017, and the City Hall Annex Construction Fund bond issue sold on
that date, city officials adopted a legal budget for the fiscal year ended December
31, 2017.
Required: Record the budget for the Bingham Debt Service Fund for year 2017.
Budgetary entries have no effect on the government-wide accounting records. The
budget provides for estimated revenues of $700,000 from property taxes, $2,000 of
interest and penalties on taxes, and $9,000 of earnings on investments. It also
provides for estimated other financing sources for premiums on bonds of $75,000
and interfund transfers in from the General Fund of $50,000. Appropriations of
$812,500 were provided for the payment of bond principal of $500,000 maturing
on September 30 and $312,500 for bond interest payments due on March 31, July 1,
and September 30, 2017 (.02 X 6/12 X $10,000,000 + .03 X 6/12 X $7,500,000
+ .02 X 6/12 X $10,000,000). (In the Debt Service Fund, the City opts not to
budget for the subsequent year January 1 interest payment.)
2. [Para. 6-b-2] Taxes were levied by the debt service fund in the amount of $705,000.
Of this amount, $5,000 was expected to be uncollectible.
Required: Record these transactions in both the debt service fund and
governmental activities journals.
3. [Para. 6-b-3] Cash in the amount of the $75,000 premium on the bonds sold on
January 1, 2017 was received and recorded in the debt service fund.
Required: Record this transaction in the debt service fund. No entry is required at
this time in the governmental activities general journal since the bond issue,
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including the related premium and accrued interest, was recorded in the
governmental activities general journal in transaction 5-a-1.
4. [Para. 6-b-4] Temporary investments were purchased in the amount of $500,000.
Required: Record this transaction in both the debt service fund and governmental
activities journals.
5. [Para. 6-b-5] Checks were written and mailed to bondholders for interest payable
on March 31, 2017.
Required: Record this transaction in both the debt service fund and governmental
activities journals. In the governmental activities general journal, debit Accrued
Interest Payable for the portion of these amounts expensed on December 31, 2016,
the end of the preceding fiscal year.
6. [Para. 6-b-6] Current taxes receivable were collected in the amount of $675,000.
Also, delinquent taxes receivable were collected in the amount of $10,000, along
with Interest and Penalties Receivable on Taxes of $600.
Required: Record these transactions in both the debt service fund and
governmental activities journals.
7. [Para. 6-b-7] Interest on temporary investments was received in cash in the amount
of $7,500.
Required: Record this transaction in both the debt service fund and governmental
activities journals.
8. [Para. 6-b-8] Temporary investments amounting to $300,000 were sold at par.
Required: Record this transaction in both the debt service fund and governmental
activities journals.
9. [Para. 6-b-9] On July 1, the debt service fund received $50,000 from the General
Fund for interest payment on the 3% serial bonds. Checks were written and mailed
to bondholders for all of the interest payments due July 1, 2017.
Required: Record the transfer in the debt service fund and the interest payment in
both the debt service fund and governmental activities journals. At the
government-wide level, $3,125 was debited for amortization of the premium on the
3% serial bonds.
10. [Para. 6-b-10] Cash to close the City Hall Annex Construction Fund was received
in the amount of $7,000. (See Chapter 5, para. 5-a-18). The city council authorized
a budget amendment for this unexpected transfer.
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Required: Record the budget amendment and transfer in the debt service fund.
This transaction involves two governmental funds, thus it has no effect on the
governmental activities general journal.
11. [Para. 6-b-11] On September 30, the debt service fund made the principal and
interest payments associated with the 2% serial bond.
Required: Record this transaction in both the debt service fund and governmental
activities journals.
12. [Para. 6-b-12] The uncollected balance of current taxes receivable and the related
estimated uncollectible account were reclassified as delinquent. Interest and
penalties of $1,200 were accrued, of which $120 was estimated to be uncollectible.
Required: Record this transaction in both the debt service fund and governmental
activities journals.
13. [Para. 6-b-13] At December 31, 2017, accrued interest expense on the two
outstanding bond issues was recorded in the governmental activities general journal.
Amortization of the premium on the 3% bonds sold was also recorded in the
amount of $3,125.
Required: Record the accrual in the governmental activities journal.
14. Verify the accuracy of all your preceding journal entries in the debt service fund
and governmental activities general journals, then click [Post Entries] of each
entity to post the entries to the respective general ledgers. For the debt service fund
only, make the entries needed to close the budgetary and operating statement
accounts at the end of fiscal year 2017 and post them to the fund’s general ledger.
(Note: You must click on the box for [Closing Entry] to check mark it; “Closing
Entry” will appear in the [Transaction Description] box for the account being
closed. Be sure the check mark is present for each account being closed.) Click
[Post Entries] to post the closing entry. Closing entries will be made in the
governmental activities general journal in Chapter 9 of this cumulative problem.
Ignore those entries for now.
c. Export the post-closing trial balance for year 2017 to an Excel worksheet and use Excel
to prepare a balance sheet for the debt service fund as of December 31, 2017. (See
Illustration 4-3 in the textbook for an example of an appropriate format of a
governmental fund balance sheet.). In addition, print the post-closing trial balance
from the [Reports] drop-down menu.
d. Export the pre-closing trial balance for year 2017 to an Excel worksheet and use Excel
to prepare a statement of revenues, expenditures, and changes in fund balance for the
Debt Service Fund for the year ended December 31, 2017. (See Illustration 4-4 in
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textbook for an example of the format of a statement of revenues, expenditures and
changes in fund balance.) Print the pre-closing trial balance from the [Reports]
drop-down menu.
e. Prepare in good form a statement of revenues, expenditures, and changes in fund
balances—budget and actual for the Debt Service Fund for the year ended December
31, 2017. (See Illustration 4-5 in the textbook for an example format.)
f. Assuming that the assessed valuation of property within the City of Bingham is
$450,000,000, and the legal general obligation debt limit is 8 percent of assessed
valuation, compute the legal debt margin of the city as of December 31, 2017. Prepare
a schedule in good form showing calculation of the legal debt limit, debt subject to the
limit, and debt margin. (Note: There is no requirement stating what amount of the
restricted fund balance must be dedicated to principal versus interest payment, so in
this instance treat the entire amount of restricted fund balance as restricted for principal
when performing your calculations.) (See Illustration 6-3 for an example).
[Note: Retain all required printouts and your financial statements in your
cumulative folder until directed by your instructor to submit them, unless your
instructor prefers to have files submitted electronically, in which case you will need
to save a .pdf version of your trial balance.]
35
Chapter 7 Recording Transactions Affecting the Enterprise Fund and
Business-Type Activities
The city water utility is owned and operated by the City of Bingham. The water utility was
originally constructed and operated by a private corporation, but it was sold to the city 30
years before the year for which transactions are given. The post-closing trial balance of the
Water Utility Fund, as of December 31, 2016, follows:
CITY OF BINGHAM
Water Utility Fund
Trial Balance
As of December 31, 2016
Debits Credits
Cash $ 513,395
Restricted Cash—Customer Deposits 62,920
Customer Accounts Receivable 176,484
Accumulated Provision for
Uncollectible Accounts $ 5,192
Inventory of Supplies 103,560
Due from Other Funds 14,300
Utility Plant in Service 20,900,429
Accumulated Depreciation—
Utility Plant 4,612,406
Construction Work in Progress 1,308,340
Vouchers Payable 81,662
Customer Deposits 62,920
Accrued Interest Payable 477,510
Revenue Bonds Payable 15,917,000
Unamortized Bond Discounts
on Revenue Bonds Payable 71,720
Net Position—Net Investment in Capital
Assets 1,751,083
Net Position—Unrestricted 243,375
Totals $23,151,148 $23,151,148
Additional information:
The following information is provided about accounts shown on the December 31,
2016, trial balance:
Accrued Interest Payable represents six months’ accrual of interest on 6% revenue
bonds payable. Interest is payable semiannually on January 1 and July 1 of each year.
Unamortized Bond Discount is credited every six months for the amortization
applicable to the interest payment period. Amortization is computed by the
straight-line method. The balance of $71,720 is to be amortized over the remaining 20
years of the bond maturity.
36
Required
a. Open a general journal as of December 31, 2016 for the Water Utility Fund by entering
each of the accounts and amounts shown in the above post-closing trial balance. Enter
2016 from the drop-down [Year] menu. Each of the account titles will be found in the
drop down menu [Account (# – Description)] in the [Journal] view of the program.
Be sure to enter 7-a as your paragraph number in the [Transaction Description] box
and enter the appropriate paragraph number for all subsequent journal entries. Verify
the accuracy of your journal entry and post it to the general ledger by clicking [Post
Entries]. Unless your instructor specifies electronic submission, print a post-closing
trial balance as of December 31, 2016, and retain it in your cumulative file until
directed by your instructor to submit it.
Entries in this enterprise fund do not have to be recorded at the government-wide level
since enterprise funds and business-type activities at the government-wide level both
use the same (accrual) basis of accounting and same (economic resources)
measurement focus. Thus, the same information recorded in the accounts of the
enterprise fund can also, with only slight modification, be reported as business-type
activities at the government-wide level.
Before closing the City of Bingham, click on [File], and [Save/Save As] to save
your work. If you close the file by clicking on the [X] box you will be asked if you
want to save your changes before closing.
b. Record the following events and transactions, which occurred during the year ended
December 31, 2017. Be sure that 2017 appears in the [Year] menu.
1. [Para. 7-b-1] Bond interest due on January 1, 2017 was paid to holders of the
revenue bonds.
2. [Para. 7-b-2] Billings to customers for water service for the year totaled $3,076,500.
Billings to the City of Bingham General Fund for water service totaled $50,000.
3. [Para. 7-b-3] Collections from customers totaled $2,996,100; $14,300 was also
received from the city’s General Fund.
4. [Para. 7-b-4] A $625,000 contract was signed for a construction project expected to
cost $970,000. Water utility employees will complete $345,000 of the project.
5. [Para. 7-b-5] Materials and supplies were ordered and received during the period in
the amount of $610,500. The invoices agreed with the purchase orders and receiving
reports and were recorded as vouchers payable. A perpetual inventory system is
used for all materials and supplies.
6. [Para. 7-b-6] Payrolls were paid totaling $685,250 for operations; $155,400 for
maintenance; and $170,500 for construction.
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7. [Para. 7-b-7] Materials and supplies issued during the period amounted to $255,000
for operations; $132,000 for maintenance; and $166,000 for construction.
8. [Para. 7-b-8] Bond interest due on July 1, 2017 was paid. As part of the journal entry,
1/40th of the Unamortized Bond Discount on Revenue Bonds Payable should be
amortized.
9. [Para. 7-b-9] Interest of $32,000 that was recorded as an expense was determined to
have been incurred during construction and should be charged to Construction Work
in Progress.
10. [Para. 7-b-10] A progress billing for $385,000 was received from the construction
contractor and paid.
11. [Para. 7-b-11] Some assets under construction at the start of the year and some
started during the year were completed and placed in service. The costs incurred on
this construction totaled $1,102,750.
12. [Para. 7-b-12] Collection efforts were discontinued on bills amounting to $5,150;
the customers owing the bills had paid deposits and interest to the water utility in the
amount of $1,450. (Note: Remember to adjust cash accounts for amounts no longer
restricted.)
13. [Para. 7-b-13] Customer deposits and interest thereon amounting to $2,500 were
applied to the final bills of customers discontinuing service. Additional deposits and
interest amounting to $2,950 were refunded by check to customers discontinuing
service. (Note: Remember to adjust cash accounts for amounts no longer restricted.)
14. [Para. 7-b-14] Deposits totaling $7,304 were received from new customers.
15. [Para. 7-b-15] Vouchers Payable paid during the year amounted to $343,600 for
operating supplies and $166,000 for materials used in construction, or $509,600 in
total.
16. [Para. 7-b-16] Interest paid on customer deposits amounted to $2,154 (charge
Operation Expense). This interest was added to the customer deposit accounts, and
the restricted cash and cash accounts were adjusted.
17. Adjusting entry – [Para. 7-b-17a] Depreciation on utility plant was calculated
using a straight-line rate of 2 percent of the beginning gross balance (round charge to
the nearest dollar).
[Para. 7-b-17b] The Accumulated Provision for Uncollectible Accounts should
equal $5,820 at year-end.
[Para. 7-b-17c] An adjusting entry for accrual of six months’ interest on bonds
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payable and amortization of 1/40 of the debt discount using the straight-line basis
was recorded.
After verifying the accuracy of all entries for the preceding transactions, post amounts
to the general ledger accounts by clicking [Post Entries].
c. Prepare entries to close all operating statement accounts at the end of 2017 and to
reclassify the two net position accounts, as appropriate. Be sure that the check mark for
[Closing Entry] is on for each account being closed and that “Closing Entry” appears
in the [Transaction Description] box. When completed, post the closing entries to the
general ledger by clicking [Post Entries].
d. Click on [File]-[Export] to export a post-closing trial balance for year 2017, and use
Excel to prepare a statement of net position for the Water Utility Fund as of December
31, 2017.
e. Click on [File]-[Export] to export a pre-closing trial balance for year 2017, and use
Excel to prepare a statement of revenues, expenses, and changes in net position for the
Water Utility Fund for the year ended December 31, 2017. Interest Expense should be
considered a nonoperating item.
f. Use the post-closing trial balance for year 2016 from Part a of this chapter, the trial
balances from parts d and e above, and Excel to prepare and save a statement of cash
flows for the Water Utility Fund for the year ended December 31, 2017.
[Note: Retain a printout of all worksheets and your financial statements in your
cumulative file until directed by your instructor to turn it in, unless your instructor
specifies computer files electronically.]
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Chapter 8 Recording Transactions Affecting a Fiduciary Fund—An
Investment Trust Fund
The city council of the City of Bingham decided in late 2017 to create an investment
pool that would put the city’s investments under professional management. The pool
will be accounted for as an investment trust fund. The name of the fund, when it is
established in early 2018, will be the Investment Pool Fund. The initial participants in
the Investment Pool Fund will be the city’s debt service fund and the Bingham
Consolidated School District (CSD). The pool will be accounted for in accordance
with GASB standards applicable to fiduciary funds; therefore, the city’s debt service
fund assets managed by the investment pool will not be reported in the Investment Pool
Fund financial statements. Unless there is a request for a withdrawal, investment
earnings and changes in the fair value of investments are distributed to participants
only at year-end. During the year, investment earnings are added to an Undistributed
Earnings on Pooled Investments account and changes in fair value are added to or
subtracted from an Undistributed Change in Fair Value of Investments Account.
a. Record the following transactions that occurred during 2018 in the Investment
Pool Fund. Do not forget to click on [Year] to change the date to 2018.
Before closing the City of Bingham, click on [File], and [Save/Save As] to save
your work. If you close the file by clicking on the [X] box you will be asked if you
want to save your changes before closing.
1. [Para. 8-a-1] On March 1, 2018, the Investment Pool Fund was formally
established with the receipt of $220,000 in cash from the city’s own debt
service fund, plus receipt from the Bingham CSD of cash bonds having a
market value of $622,000 on this date. The bonds purchased by the Bingham
CSD had a book value of $620,000 on March 1, 2018. The bonds receive
semi-annual interest of 3 percent per annum, on July 1 and January 1 each year.
The CSD’s equity is to also be credited for $3,100, which represents the two
months of interest receivable on the bonds for January and February 2018.
2. [Para. 8-a-2] The Investment Pool Fund manager purchased 4.5 percent
bonds on March 1 in the amount of $200,000. Because the bonds pay interest
semi-annually on January 1 and July 1, $1,500 in accrued interest was also
paid. (Note: Interest Receivable on Investments should be debited for the
accrued interest.)
3. [Para. 8-a-3] On March 1, the Investment Pool Fund manager also purchased
a 9-month certificate of deposit (CD) for $10,000. The interest rate on the CD
is 2 percent per annum.
4. [Para. 8-a-4] On July 1, interest on both bonds in the amount of $13,800
($9,300 and $4,500) was received in cash. (Note: Adjust for accrued interest.)
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5. [Para. 8-a-5] On November 30, the 9-month CD matured and interest was
received.
6. [Para. 8-a-6] On December 31, interest was accrued on bond investments.
7. [Para. 8-a-7]. On December 31, the fair value of investments in bonds was
$826,000. (Note: Credit Undistributed Change in Fair Value of Investments
for the increase in fair value.)
8. [Para. 8-a-8]. On December 31, the proportionate equities of the city’s debt
service fund and the Bingham CSD were calculated and investment earnings
and changes in fair value of investments were distributed accordingly. In the
journal entries round all calculations to the nearest whole dollar. (Note: You
should complete 8-c below prior to making this journal entry.)
9. [Para. 8-a-9]. Subsequent to the distribution of earnings and changes in fair
value, the Bingham CSD withdrew $200,000 to meet certain obligations
coming due. To provide the cash needed for the withdrawal, the Investment
Pool Fund manager sold the 4.5 percent bonds on December 31 for $200,000,
plus interest of $4,500, receiving in total $204,500 from the sale. (Note:
Adjust Interest Receivable on Investments for the interest received.)
b. Post the journal entries for all the preceding transactions then prepare entries to
close the temporary accounts. Be sure and click on the check mark for [Closing
Entries] and check that “Closing Entry” appears in the [Transaction Description]
box for each account closed.
c. Prepare a schedule in good form showing the proportionate equities of each of the
Investment Pool Fund’s two participants before the Bingham CSD’s $200,000
withdrawal on December 31, 2018. Round calculations to the nearest full percent.
d. Prepare a schedule in good form showing the proportionate equities of each of the
Investment Pool Fund’s two participants after the Bingham CSD’s $200,000
withdrawal on December 31, 2018. Round calculations to the nearest full percent.
e. Export the post-closing trial balance and prepare a statement of fiduciary net
position for the Investment Pool Fund as of December 31, 2018. (Note: To avoid a
rounding error use a spreadsheet to calculate the proportionate share of each asset
held by the CSD: Asset account*[CSD total equities after withdrawal/Total
equities.] Follow the format of Illustration 8-6.)
f. Export the pre-closing trial balance for this fund and prepare a statement of
changes in net position for the Investment Pool Fund for the year ended December
31, 2018. (Note: Follow the format of Illustration 8-7.) Print and retain all the
documents generated in paragraphs c. through f. in your cumulative folder, unless
your instructor requests electronic submission of your documents.
41
Chapter 9 Adjusting and Closing Entries for Governmental Activities,
Government-Wide Level; Preparation of Government-Wide and Major
Fund Financial Statements
Before the 2017 basic financial statements, both government-wide and fund, can be
prepared for the City of Bingham, you must first record and post adjusting and closing
entries for governmental activities as described below.
a. [Para. 9-a] Record depreciation expense for the year 2017 in the governmental
activities general journal at the government-wide level using the following information.
Verify accuracy of the adjusting entries and post to the general ledger by clicking [Post
Entries].
Depreciation Expense Applied to Functions:
General Government $ 704,000
Public Safety 1,408,000
Public Works 528,000
Health and Welfare 352,000
Culture and Recreation 352,000
Total depreciation expense $3,344,000
Depreciation Applicable to Asset Categories (Increases in accumulated
depreciation):
Improvements Other Than
Buildings $ 198,000
Infrastructure 638,000
Buildings 506,000
Equipment 2,002,000
Total depreciation expense $3,344,000
b. [Para. 9-b] Provide the journal entries to reclassify the current portion of long-term
debt related to the two serial bonds payable.
c. Although closing entries were made in each governmental fund of this cumulative
problem, they have not yet been recorded at the government-wide level.
Required: [Closing Entries] Record the journal entries required on December 31,
2017, to close all temporary accounts for governmental activities at the
government-wide level. These entries should also recognize changes in Net
Position—Net Investment in Capital Assets and Net Position—Restricted for Debt
Service. For each account to be closed or reclassified, be sure the check mark for
[Closing Entry] is on and that “Closing Entry” appears in the [Transaction
Description] box. Post the closing entries to the general ledger by clicking on [Post
Entries].
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Before closing the City of Bingham, click on [File], and [Save/Save As] to save
your work. If you close the file by clicking on the [X] box you will be asked if you
want to save your changes before closing.
d. Use the exportable trial balances used in Chapters 2 through 7 of this problem, and the
exportable pre-closing trial balance and post-closing trial balance for governmental
activities, to prepare all government-wide and fund financial statements that must be
presented by the City of Bingham in order for its basic financial statements to be in
conformity with generally accepted accounting principles. (See the list that follows this
paragraph and Illustrations 9-3 through 9-8 and Illustrations A2-1 through A2-9 of the
Reck and Lowensohn textbook for examples of these statements.) We recommend that
you use Excel to prepare these financial statements; however, your instructor may
require that they be prepared manually. Since the Water Utility Fund is the only fund in
the proprietary funds category, you may reprint the statement of net position, statement
of revenues, expenses, and changes in net position and the statement of cash flows
prepared for the Water Utility Fund as the required statements for the proprietary fund
basic financial statements, with suitable change in the titles of the statements, to meet
the requirement of all proprietary type funds and Business-type Activities in the
government-wide financial statements.
(Note: The City of Bingham is a primary government and has no other
organizations for which it is accountable as component units. Also, the FY 2018
financial information for the Investment Pool Fund is not included in any of the
basic financial statements you are preparing, as the statements you are preparing
pertain only to FY 2017.)
Government-wide Financial Statements
1. Statement of net position
2. Statement of activities
Fund Financial Statements
1. Balance sheet—governmental funds (with reconciliation of this statement to the
government-wide statement of activities)
2. Statement of revenues, expenditures, and changes in fund
balances—governmental funds (with reconciliation of this statement to the
government-wide statement of activities)
3. Statement of net position—proprietary funds
4. Statement of revenues, expenses, and changes in fund net position—proprietary
funds
5. Statement of cash flows—proprietary funds
43
Chapter 10 Analysis of Financial Condition (Optional, unless assigned by your
instructor)
Prepare a written evaluation of the City of Bingham’s financial position and condition as of
December 31, 2017, using appropriate ratios such as the Crawford and Associates ratios
included in Illustration 10-4 of the textbook. For purposes of calculating per capita ratios,
assume the population of the City of Bingham is 50,000.
Your written analysis should be addressed to the Honorable Mayor, City Council, and City
Manager of the City of Bingham and should summarize the financial condition of the city
overall and its funds. Be sure also to note significant changes since the end of the prior
year.
Retain a print-out of your evaluation in your cumulative project folder, unless your
instructor specifies submission by e-mail.
Chapter 11 Preparation of Audit Report (Optional, unless assigned)
Prepare the audit report you believe would be appropriate for a certified public accountant
to express on the financial statements of the City of Bingham. Explain the rationale for the
nature of the audit report (qualified or unmodified) rendered.
If you have been maintaining a cumulative file, assemble all required printed reports and
financial statements in the proper sequence and turn them in to your instructor.
—The End—