Question

The following information pertains to the City of Williamson for 2017, its first year of legal existence. For convenience, assume that all transactions are for the general fund, which has three separate functions: general government, public safety, and health and sanitation.

 

Receipts:
Property taxes	$428,000
Franchise taxes	43,800
Charges for general government services	7,000
Charges for public safety services	3,400
Charges for health and sanitation services	47,400
Issued long-term note payable	289,000
Receivables at end of year:
Property taxes (90% estimated to be collectible)	105,400
Payments:
Salary:
General government	69,200
Public safety	41,200
Health and sanitation	30,000
Rent:
General government	20,400
Public safety	19,200
Health and sanitation	4,800
Maintenance:
General government	35,500
Public safety	7,800
Health and sanitation	9,100
Insurance:
General government	10,300
Public safety ($4,600 still prepaid at end of year)	14,400
Health and sanitation	15,500
Interest on debt	23,120
Principal payment on debt	5,780
Storage shed	167,000
Equipment	122,000
Supplies (20% still held) (public safety)	18,400
Investments	112,000
Ordered but not received:
Equipment	18,500
Due in one month at end of year:
Salaries:
General government	4,500
Public safety	9,000
Health and sanitation	10,200

 

Compensated absences (such as vacations and sick days) are legally owed to general government workers at year-end total $14,100. These amounts will not be taken by the employees until so late in 2018 that the payment is not viewed as requiring 2017 current financial resources.

 

The city received a piece of art this year as a donation. It is valued at $15,200. It will be used for general government purposes. There are no eligibility requirements. The city chose not to capitalize this property.

 

The general government uses the storage shed that was acquired this year. It is being depreciated over 10 years using the straight-line method with no salvage value. The city uses the equipment for health and sanitation and depreciates it using the straight-line method over five years with no salvage value.

 

The investments are valued at $127,500 at the end of the year.

 

For the equipment that has been ordered but not yet received, the City Council (the highest decision-making body in the government) has voted to honor the commitment when the equipment is received.

 

1. a-1. Prepare a statement of activities for governmental activities for December 31, 2017.

2. a-2. Prepare a statement of net position for governmental activities for December 31, 2017.

3. b-1. Prepare a statement of revenues, expenditures, and other changes in fund balances for the general fund as of December 31, 2017. Assume that the city applies the consumption method.

4. b-2. Prepare a balance sheet for the general fund as of December 31, 2017. Assume that the city applies the consumption method.

Answer 1

Solution:

a-1) Preparing a Statement of Activities for Governmental Activities for December 31, 2017:

City of Williamson Statement of Activities For the Year Ended December 31, 2017
		Program Revenues			Net (Expense) Revenue and Changes in Net Assets
Functions/Programs	Expenses	Charges for Services	Operating Grants and Contributions	Capital Grants and Contributions	Governmental Activities	Business Type Activities	Total
Governmental activities
General Government	$185,900	$7,000		$15,200	($163,700)		($163,700)
Public Safety	$101,720	$3,400			($98,320)		($98,320)
Health and Sanitation	$94,000	$47,400			($46,600)		($46,600)
Interest on Debt	$23,120				($23,120)		($23,120)
Total governmental activities	$404,740	$57,800		$15,200	($331,740)		($331,740)
		General Revenues:
		Property taxes			$522,860		$522,860
		Franchise taxes			$43,800		$43,800
		Investments (gain)			$15,500		$15,500
		Total general revenues			$582,160		$582,160
		Change in net assets			$250,420		$250,420
		Net assets - beginning			$0		$0
		Net assets - Ending			$250,420		$250,420

$\emph{Public Safety}: [\$41,200 + \$19,200+\$7,800+\$9,800] \emph{(expired insurance)} + \$14,720 \emph{(supplies used)} + \$9,000 \emph{(salaries payable)} = \$101,720$

$\emph{General Governmental }:[\$69,200 + \$20,400 + \$35,500 + \$10,300 + \$4,500] \emph{(salaries payable)} + \$14,100 \emph{(compensated absences)} + \$15,200 \emph{(art work)}+ \$16,700\emph{(depreciation on Storage Shed}: \$167,000/10 years)] = \$185,900$$\emph{Health and Sanitation}: [\$30,000 + \$4,800 + \$9,100 + \$15,500+ \$10,200] \emph{(salaries payable) }+ \$24,400 \emph{(depreciation on equipment}: \$122,000/5 years) = \$94,000$

a-2) Preparing the Statement of Net Position for Governmental Activities for December 31, 2017:

WILLIAMSON STATEMENT OF NET ASSETS December 31, 2017
	Governmental Activities	Business Type Activities	Total
Assets:
Cash and Equivalents	$68,200		$68,200
Prepaid Expenses	$4,600		$4,600
Investments	$127,500		$127,500
Receivables (Net)	$94,860		$94,860
Inventories	$4,800		$4,800
Capital Asset (Net)	$247,900		$247,900
Total Assets	$546,460		$546,460
Liabilities:
Salaries payable	$23,700		$23,700
Compensating absences Liabilities	$14,100		$14,100
Non current Liabilities	$283,220		$283,220
	$321,020		$321,020
Net assets:
Invested in capital assets, net of related debt	($35,320)		($35,320)
Unrestricted (deficit)	$215,100		$215,100
Total Net Assets	$250,420		$250,420

Ques B Total General Fund Funds Pro S522,860 S22,860 57,800 43,800 543,800 Total Activities 57,800 Cash & Cash Equivalents 92,900 4,600 127,500 127,500 94,860 $ 94,860 92,900 4,600 nvestments $639,960 639,960 Reteivables(net 3,680 S 3,680 $139,900 101,720 69,600 General Government Public Safet Health and sanitation 139,900 Total Asset 323,540 323,540 101,720 69 Salaries Payable 780 S 23,120 Printipal Payment on debt 780 23,120 terest on debt Nonspendable 18,500 273,060 299,840 323,540 323,540 Total Ex 629,120 629,120 273,060 299,840 Unassigned Total Fund Balance Total liabilties & fund balances Excess of revenues over Other financing sources: Proceeds from long term note Total source Net changes in fund balance 10,840 $289,000 289,000 289,000 Non Spendable: Prepaid Insurance +Supplies 289,000 Fund Balance beginni Fund Balance endi 299

Please rate this answer. any mistake is their please comment it.