Question

The City of Madison, a general purpose government, reported fund balances in the amount of $24,300,000 in the governmental funds balance sheet dated December 31, 2018. In addition, the following information is relevant:
A. General government fixed assets amounted to $37,000,000. Accumulated depreciation of those fixed assets amounted to $18,000,000.
B. General long-term liabilities of the government amounted to $ 6,000,000.
C. Property taxes, which should be recognized as receivables in the government-wide statements, amounted to $3,000,000. Property taxes recognized as receivables in the governmental funds balance sheet amounted to $2,000,000; the remainder had been deferred, in accord with modified accrual accounting
D. Internal service funds net assets amounted to $6,000,000. These were reported in the proprietary funds balance sheet.
E. Liabilities, in addition to the amount reported in the governmental funds balance sheet included: (1) accrued interest payable, $300,000; (2) compensated absences payable, $4,500,000.

Prepare a reconciliation from the fund balances recognized in the governmental funds balance sheet to the net assets recognized in the governmental funds column of the government-wide statement of net assets.

Dec 31, 2018

Answer 1

City of Madison Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position As of December 31, 2018 Fund Balances Reported in Governmental Funds Balance Sheet 24,300,000 Amounts reported for governmental activities in the Statement of Net Assets are different because: Capital assets used in governmental funds are not financial resources and, therefore are not reported in the funds (37000000-18000000) 19,000,000 Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets and liabilities of internal service funds are included in governmental activities in the Statement of Net Position 6,000,000 Deferred inflows for property taxes are reported in the funds but accrued in the government-wide statements and added to Net Position 3,000,000 Accrued interest payable is accrued in the government-wide statements (300,000) Long-term liabilities, including compensated absences and bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds (10,500,000) Net Position of governmental activities 41,500,000