Question

Please show your work.

1. A government reported, in its government-wide Statement of Net Position:
• assets of $82 million, including $40 million in capital assets (cost), with $12 million in accumulated depreciation, and
• liabilities of $50 million, including long-term debt of $15 million related to capital asset acquisition.

In addition, $4 million of cash was restricted for payment of debt service. The government's Unrestricted Net Position would be reported as:
A) $20 million.
B) $19 million.
C) $15 million.
D) $ 4 million.

2.The City of Charlestown levied property taxes in the amount of $10,000,000. The taxes were levied July 1, 2016 for the fiscal year ended June 30, 2017. During the year ended June 30, 2017, $8,900,000 in property taxes were collected from this levy. It is estimated that $620,000 will be collected during the next 60 days, $300,000 will be collected more than 60 days after June 30, 2017, and $180,000 will never be collected.

How much will the city report as Deferred Inflow - Property Taxes in its June 30, 2017 government-wide Statement of Net Position?

3.

1. The General Fund of the City of Plymouth purchased a police car in the amount of $28,000. Which of the following would be true?

            A) The General Fund Statement of Revenues, Expenditures, and Changes in Fund Balances would report an expenditure of $28,000.

            B)   The government-wide Statement of Activities would report an expense of $28,000.

            C)   Both of the above.

D.  Neither of the above.

Answer 1

1. Unrestricted net position = Assets - Liabilities -Fixed Assets

Assets including Fixed Assets is $82 Million

Fixed Assets (NET) is $ 28 Million

Liabilities is $ 50 Million

This implies Unrestricted net position is $ 4million ( in million $ 82-28-50)

2. The city will have to report net of un-collectible as deferred revenues.

Thus it will be $620000+$300000 = $920000 deferred revenues.

To the extent of $180000 an allowance for un-collectible has to be created in the books of accounts.

3. The answer is C.