Question

9. The City of Henderson reported a change in fund balances of $2,20 governmental funds Statement of Revenues, Expenditures ted a change in fund balances of $2,267,000 in its Balances for the year ended December 31, 2017. In a of Revenues, Expenditures, and Changes in Fund information is relevant: the year ended December 31, 2017. In addition, the following A. Capital outlay expenditures amounted to $8,755,000 statement. General government capital assets amoun enditures amounted to $8,755,000 in the modified accrual excluding land and had an average life of 20 years. vernment capital assets amounted to $90,000,000, B. The modified accrual statement reported proceeds 1 amount of $500,000. The land had a basis of $390,000. statement reported proceeds from the sale of land in the C. y taxes had been levied in the amount of $10,000,000. It was estimated that 3% would never be collected, that $500,000 would be collected within 60 days of year-end, and that $217.000 would be collected more than 60 days from year-end. The City had recognized the maximum permitted under modified accrual accounting. D. $205,000 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. E. The modified accrual statement reflected debt service expenditures in the amount of $500,000 for interest and $612,000 for principal. No adjustment was necessary for interest accruals at year-end. F. Long term compensated absences liabilities increased $120,000 from the previous

Answer 1

CITY OF HENDERSON
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE
STATEMENT OF ACTIVITIES FOR THE YEAR ENDED
DECEMBER 31, 2017
										$
Net change in fund balances-total governmental funds										22,67,000
Amounts reported for governmental activities in the Statementof Activities are different because:
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period.										42,55,000
In the Statement of Activities, only the gain on the sale of land is reported, whereas in the governmental funds, the proceeds from the sale increase financial resources. Thus, the change in Net Position differs from the change in fund balance by the cost of the land sold.										-3,90,000
Revenues in the Statement of Activities that do not provide currentfinancial resources are not reported as revenues in the funds(property taxes)										12,000
Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement ofNet Position.										6,12,000
Some expenses in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental funds										-1,20,000
Change in Net Position of governmental activities										66,36,000