Question

Forest City has recently implemented GAAP reporting and is attempting to determine which of the following special revenue funds should be classified as “major funds” and, therefore, be reported in separate columns on the balance sheet and statement of revenues, expenditures, and changes in fund balances for the governmental funds. As the city’s external auditor, you have been asked to provide a rationale for either including or excluding each of the following funds as a major fund. Determine which of the following funds should be reported as a major fund. (Round percentage answers to 1 decimal place.)

FOREST CITY As of fiscal year-end Gas Tax Revenue Fund % of Govern-mental Funds % of Govern-mental and Enterprise Funds Housing and Urban Development Grant Fund % of Govern-mental Funds % of Govern-mental and Enterprise Funds Forest City Library Fund % of Govern-mental Funds % of Govern-mental and Enterprise Funds All Governmental Funds All Governmental and Enterprise Funds Total assets $160,748 % % $175,111 % % $101,549 % % $1,563,867 $3,497,398 Total liabilities 72,551 % % 85,433 % % 0 % % 867,533 1,487,225 Total revenues 138,336 % % 169,964 % % 120,589 % % 1,537,399 2,987,487 Total expenditures 124,225 % % 130,583 % % 119,812 % % 1,496,223 2,684,531 Include as a major fund?

Answer 1

Forest City As of fiscal year-end h b=a/j % of Governmental Funds 10.3 8.4 c=a/k % of Governmental & Enterprise Funds a Gas Tax Revenue Fund 160748 72551 138336 124225 NO e=d/j % of Governmental Funds 11.2 9.8 fre/k % of Governmental & Enterprise Funds % g Forest City Library Funds 101549 =g/j % of Governmental Funds T=g/k % of Governmental & Enterprise Funds 2.9 % 4.6 6.5 k All All Governmental Governmental Funds & Enterprise Funds 1563867 3497398 867533 1487225 1537399 2987487 1496223 2684531 Housing and Urban Development Grant Fund 175111 85433 169964 130583 YES Total assets Total liabilities Total revenues Total expenditures Include as a major fund? 4.9 % 4.6 11.1 4.6 8.7 % 120589 119812 NO