Question

nu SUV -WIU d ldl SlallIIlI. 51. Indicate (i) how each of the following transactions impacts the fund balance of the general fund. and its classifications, for fund financial statements and (ii) what impact each transaction has on the net position balance of the Government Activities on the government-wide financial statement a. Issue a five-year bond for $6 million to finance general operations. b. Pay cash of $149,000 for a truck to be used by the police department. C. The fire department pays $17,000 to a government motor pool that services the vehicles of only! the police and fire departments. Work was done on several department vehicles.

a through h please answer. with work shown for any calculations.

Answer 1

Solution- А Fund-based financial statements-the fund balance goes up by $6 million because of the inflow of current financial resources. Government-wide financial statements - the net asset balance does not change. Both assets (cash) and liabilities (bonds payable) go up by the same $6 million amount. No increase in net assets. B Fund-based financial statements - the fund balance goes down by $149,000 because of the outflow of current financial resources. Government-wide financial statements - the net asset balance does not change. One asset (truck) goes up while a second asset (cash) goes down. Fund-based financial statements - the fund balance goes down for the General Fund by $17,000 because of the outflow of current financial resources. Government-wide financial statements the net assets balance does not change. This is an internal exchange transaction within the govermental activities so that no net change is created. The motor pool is an internal service that is part of govermental activities because it service the vehicles of the fire and police department d. Fund-based financial statements - the fund balance is not affected because the resources will not be collected quickly enough to be available in the current period. An asset (receivable) is recognized along with a liability (deferred revenue) so that the size of the fund balance is not affected. Government-wide financial statements - A $75,000 receivable and revenue are recognized so that the net asset balance goes up by that amount. Fund-based financial statements - the fund balance is not affected. The money is not recognized as revenue until all eligibility requirements have been met. Because that does not appear to be the case, the cash will go up along with a liability for the deferred revenue. Government-wide financial statements - the net asset balance does not change. The accounting is the same as explained for the fund-based financial statements. Fund-based financial statements - the fund balance should go up by $1 million. The sale took place in the current year and the resources will all be received within the 75 day period being used to define available resources. Government-wide financial statements - the net asset balance goes up by $1 million because the sale was made in the current period Fund-based financial statements - the fund balance is not affected. Although an encumbrance may be recorded to avoid spending more than the appropriated amount, that has no impact on the total amount of the fund balance. It may well change the way the fund balance is labeled but not the total. Government-wide financial statements - a purchase order or other commitment has no impact on the net asset balance. H Fund based financial statements the fund balance for the general fund goes down by $18,000 because the transfer has been approved and will be removed current financial resources. Government wide financial statements there is no impact on the net assets balance of the governmental activities because this is an intra-activity transfer from one Governmental Fund to another. There is no net effect.