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Finance

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1. The members of the Museum Board of the City of Springfield are appointed by the City of Springfield City Council, which has agreed to finance any operating deficits of the museum. Under these conditions

2. Raider City has established a legally separate public financing corporation to issue debt for the city’s capital projects. The corporation’s debt will be paid by the city. How should the public financing corporation be reported by the city?

3. Which of the following statements is used to determine whether a component unit should be classified as major?

4. The comprehensive annual financial report (CAFR) of a government reporting entity should contain a statement of cash flows for:

	Governmental Funds	Proprietary Funds
a.	Yes	No
b.	Yes	Yes
c.	No	Yes
d.	No	No

 

5. Which of the following terms would be used when describing a primary government?

 

6. The GASB defines a financial reporting entity as the primary government and the entities for which the primary government is financially accountable.

Required
Following is a list of entities being considered for classification as primary governments, for each of the entities listed indicate Yes if the entity would be considered a primary government and No if it would not be considered a primary government.

 

	1. Waseca County government.   2. University of South Florida, a part of the State University System of Florida.   3. The Tri-County Independent School District, a legal entity, with an elected board and financial independence.   4. The State of Colorado.   5. Greenfield Sports Authority, a joint venture between Greenfield County and the Mighty Ducks Sports franchise.

 

7.  Section A provides a list of transactions or events that occurred during the year, followed by Section B, a list of the possible effects each transaction or event has on adjusting net position accounts at year-end, assuming that all temporary accounts have already been closed to the account Net Position—Unrestricted

Section B

1. Restricted Net Position is increased and Unrestricted Net Position is decreased.
2. Restricted Net Position is decreased and Unrestricted Net Position is increased.
3. Net Investment in Capital Assets is increased and Unrestricted Net Position is decreased.
4. Net Investment in Capital Assets is decreased and Unrestricted Net Position is increased.
5. None of the above.
    

Required
Identify how the net position categories would need to be adjusted for each of the transactions. For the statement in Section A, select the appropriate answer from Section B

 

 

Section A Section B 1. Depreciation was recorded for the year.   2. A fully depreciated computer was sold for $50.   3. Bonds issued to construct the new library were retired.   4. Construction expenditures were incurred for the new fire substation.   5. Grant funds that can only be used for a summer kids’ camp remain unexpended at year-end.   6. A short-term lease was entered into during the year.   7. A $3 million endowment was received during the year.   8. Several new fire trucks were purchased and 70 percent financed with long-term notes.   9. The capital projects fund transferred its residual fund balance to the debt service fund during the year.   10. A grant received in the prior year for after-school recreational activities was expended.

 

8. Following is the governmental activities pre-closing trial balance for the Town of Freaz. Freaz is a relatively small town and, as a result, it has only governmental funds (i. e., it uses no proprietary funds). There are no component units. To complete the financial statements for its annual report, the town must prepare a government-wide statement of net position and a statement of activities.
 

TOWN OF FREAZ
Pre-closing Trial Balance
As of June 30, 2020
(000s omitted)
	Debits				Credits
Cash	$	3,639
Investments		7,299
Taxes Receivable—Delinquent		5,788
Allowance for Uncollectible Delinquent Taxes					$	49
Due from Other Funds		645
Due from Other Governments		6,343
Land		8,720
Buildings		25,680
Accumulated Depreciation—Buildings						8,021
Infrastructure		85,768
Accumulated Depreciation—Infrastructure						45,603
Machinery & Equipment		28,720
Accumulated Depreciation—Machinery & Equipment						13,785
Accounts Payable						7,764
Accrued Liabilities						4,765
Due to Other Funds						748
Current Portion of Long-term Debt						8,600
Bonds Payable						28,700
Net Position—Net Investment in Capital Assets						45,259
Net Position—Restricted for Debt Service						2,123
Net Position—Unrestricted						6,598
Program Revenues—General Government—Charges for Services						4,411
Program Revenues—Public Safety—Charges for Services						996
Program Revenues—Culture & Recreation—Charges for Services						359
Program Revenues—General Government—Operating Grants & Contributions						307
Program Revenues—Public Works—Capital Grants & Contributions						1,680
General Revenues—Property Taxes						13,665
General Revenues—Interest & Penalties						746
General Revenues—Interest Income						345
Expenses—General Government		2,468
Expenses—Public Safety		11,577
Expenses—Public Works		5,311
Expenses—Culture & Recreation		1,817
Expenses—Interest on Long-term Debt		749
	$	194,524			$	194,524

The restricted net position for debt service increased $87 for FY 2020. The net position accounts do not reflect FY 2020 depreciation of $1,080 that was allocated to the functions of government, or the town’s decision to designate $900 for street repair. (All 000s omitted.)

Required

Using the trial balance provided by the town, prepare a government-wide statement of net position.

 

 

Using the trial balance provided by the town, prepare a government-wide statement of activities.