Question

8. The City of Madison, a general purpose government, reported fund balances in the amount of $19,700,000 in the governmental funds balance sheet dated December 31, 2017. In addition, the following information is relevant: A. General government capital assets amounted to $28,000,000. Accumulated depreciation of those capital assets amounted to $13,000,000. Enterprise fund capital assets amounted to $ 17,000,000 with accumulated depreciation of $ 8,400,000. B. Internal service fund's net assets amounted to $2,500,000. These were reported in the proprietary funds fund basis statements but serve departments in the General Fund. C. Property Taxes, which should be recognized as revenue in the government-wide statements, amounted to $ 200,000. The balance of deferred inflows - property taxes from the previous year was $ 170,000. D. Liabilities, in addition to the amount reported in the governmental funds balance sheet included accrued interest payable, $300,000; E. General long-term liabilities of the government amounted to (1) general obligation bonds of $ 6,000,000 and (2) compensated absences payable of $1,500,000. Revenue Bonds Payable in the enterprise fund totaled $ 2,000,000. Required: Prepare a reconciliation from the fund balances recognized in the governmental funds balance sheet to the Net Position recognized in the governmental funds column of the government-wide statement of Net Position to 67 000 in its

Answer 1

City of Madison Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets As of December 31, 2017 Fund Balances Reported in Governmental Funds Balance Sheet 19700000 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental funds are not financial resources and, therefore are not reported in the funds 15000000 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 2500000 Deferred inflows for property taxes are reported in the funds but accrued in the government-wide statements and added to Net Position 200000 Accrued interest payable is accrued in the government-wide statements -300000 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 - 7500000 Net Position of governmental activities 29600000