A city has only one activity, its school system. The school system is accounted for within the general fund. For convenience, assume that, at the start of 2017, the school system and the city have no assets. During the year, the city assessed $400,000 in property taxes. Of this amount, it collected $320,000 during the year, received $50,000 within a few weeks after the end of the year, and expected the remainder to be collected about six months later. The city makes the following payments during 2017: salary expense. $100,000 rent expense, $70,000; equipment (received on January 1 with a five-year life and no salvage value), $50,000; land. $30,000; and maintenance expense, $20,000.
In addition, on the last day of the year, the city purchased a $200,000 building by signing a long-term liability. The building has a 20-year life and no salvage value, and the liability accrues interest at a 10 percent annual rate. The city also buys two computers on the last day of the year for $4,000 each. One will be paid for in 30 days and the other in 90 days. The computers should last for four years and have no salvage value. During the year, the school system charged students $3,000 for school fees and collected the entire amount. Any
- a. Produce a statement of net position and a statement of activities for this city’s government-wide financial statements.
- b. Produce a
balance sheet and a statement of revenues, expenditures, and changes in fund balance for the fund financial statements. Assume that available is defined by the city as anything to be received within 60 days.
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Chapter 16 Solutions
ADVANCED ACCOUNTING-LL
- Use the following information for Problems 53–59: Assume that the City of Coyote has already produced its financial statements for December 31, 2017, and the year then ended. The city’s general fund was only for education and parks. Its capital projects funds worked with each of these functions at times during the current year. The city also had established an enterprise fund to account for its art museum. The government-wide financial statements indicated the following figures: Education reported net expenses of $600,000. Parks reported net expenses of $100,000. Art museum reported net revenues of $50,000. General government revenues for the year were $800,000 with an overall increase in the city’s net position of $150,000. The fund financial statements indicated the following for the entire year: The general fund reported a $30,000 increase in its fund balance. The capital projects fund reported a $40,000 increase in its fund balance. The enterprise fund reported a $60,000…arrow_forwardUse the following information for Problems 53–59: Assume that the City of Coyote has already produced its financial statements for December 31, 2017, and the year then ended. The city’s general fund was only for education and parks. Its capital projects funds worked with each of these functions at times during the current year. The city also had established an enterprise fund to account for its art museum. The government-wide financial statements indicated the following figures: Education reported net expenses of $600,000. Parks reported net expenses of $100,000. Art museum reported net revenues of $50,000. General government revenues for the year were $800,000 with an overall increase in the city’s net position of $150,000. The fund financial statements indicated the following for the entire year: The general fund reported a $30,000 increase in its fund balance. The capital projects fund reported a $40,000 increase in its fund balance. The enterprise fund reported a $60,000…arrow_forwardDuring the fiscal year ended 6/30/18, the Harriscity engaged in the following transactions. REQUIRED: Assume that the city maintains its books and records in a manner that facilitates the preparation of its governmental fund financial statements. Prepare all necessary journal entries that the city should make for each transaction. Clearly indicate in which fund the entry is being made. If no entry is required, write “No entry required.” a)In July 2017, the city issued $30 million in 6% general obligation term bonds to finance construction of a new building to house city offices. The bonds were issued at a premium of $300,000. b)In September 2017, the city transferred $1.5 million from the general fund to cover the $0.9 million principal and $0.6 million interest payments due that month on debt issued in previous years. c)In September 2017, the city paid the principal and interest due from (b). d)In June 2018, the city transferred $3 million from the general fund to cover the $1.8…arrow_forward
- Assume that the City of Coyote has already produced Its financlal statements for December 31, 2017, and the year then ended. The city's general fund was only for education and parks. Its capital projects funds worked wth each of these functlons at times during the current year. The city also had established an enterprise fund to account for Its art museum.arrow_forwardAssume that the City of Coyote has already produced its financial statements for December 31, 2017, and the year then ended. The city’s general fund was only for education and parks. Its capital projects funds worked with each of these functions at times during the current year. The city also had established an enterprise fund to account for its art museum.The government-wide financial statements indicated the following figures:∙ Education reported net expenses of $600,000.∙ Parks reported net expenses of $100,000.∙ Art museum reported net revenues of $50,000.∙ General government revenues for the year were $800,000 with an overall increase in the city’s net position of $150,000.The fund financial statements indicated the following for the entire year:∙ The general fund reported a $30,000 increase in its fund balance.∙ The capital projects fund reported a $40,000 increase in its fund balance.∙ The enterprise fund reported a $60,000 increase in its net position.The CPA firm of Abernethy…arrow_forwardAssume that the City of Coyote has already produced its financial statements for December 31, 2017, and the year then ended. The city’s general fund was only for education and parks. Its capital projects funds worked with each of these functions at times during the current year. The city also had established an enterprise fund to account for its art museum.The government-wide financial statements indicated the following figures:∙ Education reported net expenses of $600,000.∙ Parks reported net expenses of $100,000.∙ Art museum reported net revenues of $50,000.∙ General government revenues for the year were $800,000 with an overall increase in the city’s net position of $150,000.The fund financial statements indicated the following for the entire year:∙ The general fund reported a $30,000 increase in its fund balance.∙ The capital projects fund reported a $40,000 increase in its fund balance.∙ The enterprise fund reported a $60,000 increase in its net position.The CPA firm of Abernethy…arrow_forward
- On January 1, 2019, a city recorded General Fund property tax revenues of $750,000 but made no provision for uncollectible receivables or tax refunds. During the year, it collected property taxes of $720,000, wrote off $4,000 as uncollectible, and made tax refunds of $3,000. At year-end, the city finance director concluded that $10,000 of the delinquent taxes would be collected in January and February of 2020, $12,000 would be collected later in 2020, and $1,000 would need to be written off as uncollectible. How much should the city report as property tax revenue in its General Fund financial statements for the year 2019? a.713,000 b.730,000 c.720,000 d.742,000arrow_forwardThe City of Lexington is preparing its government-wide financial statements from its fund financial statements. The City records Deferred Revenue with a book value of $3,500 and Compensated Absences of $2,000 (all numbers in $1,000s) at the beginning of the year. During the year, these accounts increased by $1,500 and $900, respectively. What reconciliation entries must the City include in its government-wide financial statements relating to Deferred Revenues and Compensated Absences? Please show work so I can follow along to learn. THANK YOU! Reconciliation Spreadsheet Description Debit Credit Revenues To record reconciliation entry for deferred revenue. Compensated absence expense To record reconciliation entry for compensated absences.arrow_forwardThe City of Bernard starts the year of 2017 with the following unrestricted amounts in its general fund: cash of $20,000 and investments of $70,000. In addition, it holds a small building bought on January 1, 2016, for general government purposes for $300,000 and related long-term debt of $240,000. The building is being depreciated on the straight-line method over 10 years. The interest rate is 10 percent. The general fund has four separate functions: general government, public safety, public works, and health and sanitation. Other information includes the following: On the last day of the year, the city borrowed $64,000 from a local bank and used that money to buy a truck. The first payment on the loan (plus interest) will be made at the end of the next year. The city started a landfill this year that it is recording within its general fund. It is included as a public works function. Closure costs today would be $260,000 although the landfill is not expected to be filled for nine more…arrow_forward
- The City of Iroy collects its annual property taxes late in its fiscal year. Consequently, each year it must finance part of its operating budget using tax anticipation notes. The notes are repaid upon collection of property taxes. On April 1, the city estimated that it will require $1,800,000 to finance governmental activities for the remainder of the fiscal year. On that date, it had $700,000 of cash on hand and $760,000 of current liabilities. Collections for the remainder of the year from revenues other than current property taxes and from delinquent property taxes, including interest and penalties, were estimated at $750,000. Required a. Calculate the estimated amount of tax anticipation financing that will be required for the remainder of the current fiscal year. b. Assume that on April 2, the City of Troy borrowed the amount calculated in part a by signing tax anticipation notes bearing 7 percent per annum to a local bank. Record the issuance of the tax anticipation notes in the…arrow_forwardThe City of Greystone maintains its books so as to prepare fund accounting statements and prepares worksheet adjustments in order to prepare government-wide statements. You are to prepare, in journal form, worksheet adjustments for each of the following situations: The City levied property taxes for the current fiscal year in the amount of $8,000,000. At year-end, $720,000 of the taxes had not been collected. It was estimated that $330,000 of that amount would be collected during the 60 days after the end of the fiscal year and that $360,000 would be collected after that time and the balance would be uncollectible. The City had recognized the maximum of property taxes allowable under modified accrual accounting. $255,000 of property taxes had been deferred at the end of the previous year and was recognized under modified accrual as revenue in the current year. In addition to the expenditures reported under modified accrual accounting, the city computed that an additional $104,000…arrow_forwardBen City maintains its books and records in a manner that facilitates the preparation of fund financial statements. Prepare all necessary journal entries to record the following events related to property tax revenues for the year ended December 31, 2017. The city has adopted the 60-day rule for property tax revenue recognition. a. On January 3, 2017 the city council levied property taxes of $2 million to support general government operations, due in two equal installments on June 20 and December 20, 2017. The property taxes were levied to finance the 2017 budget, which had been adopted on November 3, 2016. Historically 2 percent of property taxes are uncollectible. b. The city collected the following amounts related to property taxes Delinquent 2016 taxes collected in January 2017 $ 22,000 Delinquent 2016 taxes collected in March 2017 $ 25,000 2017 taxes collected in June 2017 $ 1,080 2017 taxes collected in December 2017 $ 800,000 Delinquent 2017 taxes collected in January 2018 $…arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
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