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446
PROBLEM 13-8
a.
City of Toledo
Revenues – Business-Type Activities
Charge for Services
Vertical Common-Size
Business-type activities:
2003
2004
2005
2006
2007
2008
2009
2010
Charges for services:
Water
36.9
37.5
36.6
35.5
35.2
32.2
32.1
32.9
Sewer
40.0
43.7
42.7
45.2
44.5
47.5
48.4
44.4
Storm utility
9.4
8.4
8.5
8.3
7.9
7.7
9.0
7.6
Utilities administration
9.2
8.6
10.1
8.0
8.8
8.9
7.8
7.8
Parking
1.5
1.5
1.4
1.5
1.3
1.3
1.3
1.1
Property management
1.0
0.3
0.3
(0.7)
0.2
0.2
0.2
0.4
Small business development
0.1
0.1
0.0
(0.0)
-----
-----
-----
0.1
Tow lot
-----
-----
0.5
2.3
2.1
2.2
1.3
1.5
Capital grants
1.8
-----
-----
-----
-----
-----
-----
4.2
Total business-type activities
revenues
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
b. Material decrease in water
Material increase in sewer
Material decrease in storm utility
447
PROBLEM 13-9
a.
City of Toledo
Vertical Common-Size
Fiscal
Year
Assessed
Value(2)
Net General
Bonded Debt(2)
Net Bonded
Debt Per Capital
2010
94.5
116.6
127.3
2009
102.6
123.7
123.7
2008
106.8
111.0
111.0
2007
114.1
106.9
106.9
2006
119.6
102.8
102.8
2005
108.5
104.2
104.2
2004
109.9
103.2
103.2
2003
109.6
102.2
102.2
2002
99.6
103.5
103.5
2001
100.0
100.0
100.0
(2) Personal property starting in 2010 is not part of this calculation.
b. Assessed value increased materially, peaking in 2006. It then decreased materially
Net general bonded debt increased materially.
Net bonded debt per capita increased materially at approximately the same rate as
448
PROBLEM 13-10
a.
The Ohio Society of Certified Public Accountants
Consolidated Statement of Financial Position
April 30, 2011
Vertical Common-Size
Assets
Cash and cash equivalents
3.9
Accounts receivable, net
0.5
Pledged receivable, net
6.1
Prepaid expenses and deposits
2.2
Prepaid pension
3.3
Investments
66.3
Property, net
17.8
Total assets
100.0
Liabilities and Net Assets
Liabilities
Accounts payable and accrued liabilities
13.0
Deferred revenue
12.5
Short-term borrowings
-----
Mortgage payable
12.9
Total liabilities
38.4
Net assets
Unrestricted
32.9
Temporarily restricted
3.4
Permanently restricted
25.3
Total net assets
61.6
Total Liabilities and Net Assets
100.0
The most significant asset is investments, followed by property.
temporarily restricted far behind.
449
b.
The Ohio Society of Certified Public Accountants
Consolidated Statement of Activities
Year Ended April 30, 2011
Vertical Common-Size
Unrestricted
Total
Revenue
Dues
49.8
49.8
Education and training course fees
37.0
37.0
Peer review fees
5.3
5.3
Public relations and publications
4.1
4.1
Investment income, net
3.3
4.0
Member connections and sections
2.7
2.7
Other
2.1
2.1
Foundation contributions
0.6
1.2
Membership affinity programs
0.5
0.5
Released from restrictions
– scholarships
0.3
-----
– net assets
0.4
-----
Total revenue
106.1
106.8
Expenses
Education and training programs
40.2
40.2
Public relations and publications
18.1
18.1
General and administrative
13.3
13.3
Governmental affairs
8.1
8.1
Membership
7.4
7.4
Peer review
5.9
5.9
Member Connections and sections
5.8
5.8
Interest
0.8
0.8
Foundation scholarships
0.4
0.4
Total expenses
100.0
100.0
is education and training course fees.
450
PROBLEM 13-11
their mission.
Expenses as follows:
PROBLEM 13-12
a.
1
For a statement of changes in net worth, dividend income would be a
realized increase in net worth.
b.
1
For a statement of changes in net worth, an increase in the value of land
would be an unrealized increase in net worth.
c.
1
Reviewing realized decreases in net worth is not a suggestion for
reviewing the statement of financial condition.
d.
5
Bank statements, checkbooks, real estate tax returns, and insurance
policies would be a source of information for personal financial
statements.
e.
1
Presenting a car at cost would not be an acceptable presentation on a
personal financial statement.
PROBLEM 13-13
a.
1
A reasonable definition of proprietary funds is funds whose purpose is to
maintain the assets through cost reimbursement by users or partial cost
recovery from users and periodic infusion of additional assets.
b.
5
Funds established for a specific purpose would include highway
maintenance, parks, debt repayment, and endowment.
c.
1
Statement of cash flow is not a minimum requirement for general-
purpose external financial statements – state and local governments.
d.
5
Know facts, decisions or conditions expected to have a significant impact
on financial position or results of operations.
e.
3
GASB statement No. 34 makes it clear that neither government-wide
statements nor fund statements are considered superior or subordinate
to the other.
451
PROBLEM 13-14
a.
4
Not-for-profit organizations are to present three aggregated financial
statements.
b.
1
A bank is an example of a profit institution.
c.
3
Not-for-profit accounting principles were derived form numerous not-for-
profit industry accounting manuals and audit guides.
d.
2
The accounting for a nonprofit institution does not have a bottom-line net
income.
452
CASES
CASE 13-1 DEFICIT BUDGET?
b. According to the efficient market hypothesis, disclosure is the important element, not
explicit for maximum benefit.
CASE 13-2 MY MUD HENS
a. The Mud Hens would present a nonprofit statement. It should disclose the
relationship with Lucas County, Ohio.
b. Lucas County, Ohio, presents the Toledo Mud Hens Baseball Club, Inc. as a
accountable.
d. Yes.
Net Assets:
Invested in capital assets, net of related debt
$
3,452,865
Unrestricted
6,550,516
Total net assets
$
10,003,382
453
CASE 13-3 JEEP
firm.)
consolidated into the Lucas County statements, nor does it qualify to be presented
as a component unit.
(This case represents an opportunity to make a limited review of the Lucas County
financial report.)
a.
Table 5
Lucas County, Ohio
Revenues by Service
Last Ten Fiscal Years
Horizontal Common-Size
Fiscal
Year
General
&
Tangible
Personal
Property
Taxes
Sales
Tax
Lodging
Tax
Invest-
ment
Income
Charges
For
Services
Fines
&
Forfeitures
Licenses
&
Permits
Special
Assess-
ments
Intergovern-
mental
Revenue
Other
Total
2001
20.4
15.9
0.8
3.0
5.5
0.2
0.0
0.6
43.9
9.8
100.0
2002
24.2
15.9
0.9
1.9
5.8
0.1
0.0
0.5
41.6
9.0
100.0
2003
24.0
15.2
0.8
0.9
5.9
0.2
0.0
0.4
41.9
10.8
100.0
2004
24.7
16.1
0.8
0.7
6.5
0.1
0.0
0.5
45.3
5.2
100.0
2005
24.5
15.9
0.8
1.6
6.4
0.2
0.0
0.6
45.5
4.5
100.0
2006
21.8
14.9
0.8
2.4
6.2
0.1
0.0
0.5
49.1
4.1
100.0
2007
18.5
13.6
0.7
2.7
6.6
0.1
0.0
1.4
43.7
12.7
100.0
2008
17.7
14.3
1.3
3.0
6.8
0.1
0.0
0.7
52.4
3.7
100.0
2009
19.4
12.8
0.8
1.0
6.5
0.2
0.1
0.4
51.5
7.2
100.0
2010
18.9
14.0
0.9
1.0
7.4
0.1
0.2
0.7
50.6
6.3
100.0
increased materially.
General & tangible personal property taxes represented a second major source of
Charges for services was the fourth major source of revenue. This source
increased materially.
454
c.
Table 5
Lucas County, Ohio
Revenues by Service
Last Ten Fiscal Years
Vertical Common-Size
Fiscal
Year
General
&
Tangible
Personal
Property
Taxes
Sales
Tax
Lodging
Tax
Invest-
ment
Income
Charges
For
Services
Fines
&
Forfeitures
Licenses
&
Permits
Special
Assess-
ments
Intergovern-
mental
Revenue
Other
Total
2001
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.1
100.0
100.0
2002
114.5
96.8
118.9
61.5
100.5
90.2
108.8
89.2
91.6
88.6
96.5
2003
116.9
95.1
106.2
29.7
104.9
101.7
158.5
68.3
94.8
109.5
99.3
2004
118.3
99.3
106.4
23.4
115.3
97.3
211.8
78.8
100.9
51.8
97.7
2005
119.8
100.2
110.6
52.2
115.8
108.7
97.1
97.8
103.5
45.7
99.8
2006
114.6
100.5
115.4
85.6
120.2
121.2
88.2
91.8
120.2
45.2
107.3
2007
107.2
101.3
108.6
104.7
140.7
102.0
88.2
293.7
118.1
153.4
118.4
2008
97.4
101.2
188.1
111.3
137.0
111.7
76.5
132.3
133.9
42.3
112.2
2009
107.8
91.3
122.4
37.4
133.0
146.1
2,138.2
82.2
132.7
83.3
113.1
2010
101.5
96.6
132.0
34.7
145.9
101.2
2,382.4
123.7
126.6
71.2
109.8
2009 and 2010.
455
CASE 13-5 COUNTY-WIDE
analysis.)
Provided here is a quote from the management’s discussion and analysis. Not all of
County-Wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a county’s
activities. By far, the largest portion of the county’s net assets (52.18%) reflects its
investment in capital assets, which includes land, buildings, machinery and equipment,
An additional portion of the county’s net assets (35.42%) represents resources that are
subject to restrictions on how they can be used. The remaining balance of unrestricted
