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City of Monroe Continuous Problem Part 4 – Government-wide Statements   Assemble the following: 1

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City of Monroe Continuous Problem

Part 4 – Government-wide Statements

 

Assemble the following: 1. Governmental funds financial statements (from your work in part 2)

2. Internal service fund financial statement (from your work in part 3.)

3. Enterprise total fund financial statements (from your work in part 3.)

3. City of Monroe government fund conversion worksheet (separate worksheet on Bb.) This worksheet also includes the templates for the government wide financial statements. Note: Be sure to update your work in previous parts of the Continuous Problem based on feedback and corrections.

Required:

1. The conversion worksheet for adjustments has been started for you. The total balances from the combined governmental funds financial statements including the General Fund, Special Revenue Fund, Capital Projects Fund, Debt Service Fund (city hall), and the Debt Service Fund (city jail) have already been entered.

 

· Net position: Uses a single account for net position (which will includes the beginning balance of all fund balance accounts regardless of classification.)

 

· Intergovernmental Revenues: The worksheet has been set up using a separate line for different types of intergovernmental revenues as follows:

 

State Grant for Maintenance and Street Maintenance	$ 1,065,000
Operational Grant—General Government	332,000
Capital Grant—Public Safety	1,340,000
total	$2,737,000

 

· Capital Assets: Use one line for the total Capital Assets (regardless of type) and one row for total Accumulated Depreciation.

 

· As you make adjustments throughout the worksheet, confirm that the total debits and credits equal before proceeding with the next adjustment.

 

 

2. Prepare worksheet entries and post to the worksheet for the following items. Identify each adjustment by the letter used in the problem:

 

Note: When you add beginning balances for long term assets or long term liabilities, debit or credit the appropriate line. The second half of the entry will be a debit or credit to the net position.

 

When you eliminate an entry such as capital outlay expenditure, stop and think, “Where or how is that item recorded in full accrual accounting.” For example, to eliminate capital outlay expenditure, you would credit that line item and debit capital assets.

 

a. Record the January 1, 2017 balances of general fixed assets and related accumulated depreciation accounts. The City of Monroe had the following balances (excluding Internal Service Funds):

 

	Cost	Accumulated Depreciation
Totals	$ 64,200,000	28,700,000

 

 

 

b. Eliminate the capital expenditures shown in the governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balances.

c. Depreciation expense (governmental activities) for the year totaled $ 4,900,000.

d. Eliminate the other financing sources from the sale of bonds by recording a liability for bonds payable and the related premium.

e. As of January 1, 2017, the City of Monroe had $12,000,000 in general obligation bonds outstanding.

f. Eliminate the expenditures for bond principal.

g. Accrue interest in the amount of $328,000. (Two bond issues were outstanding; interest payments for both were last made on July 1, 2017. The computation is as follows: ($11,200,000 × .03 × 6/12) + ($4,000,000 ×. 08 × 6/12) = $328,000).

h. Adjust for the interest accrued in the prior year government-wide statements, but recorded as an expenditure in the 2017 fund basis statements, ($12,000,000 × .03 × 6/12) = $180,000.

i. Amortize bond premium in the amount of $ 10,000.

j. Make adjustments for additional revenue accrual. The only adjustment is for property taxes to eliminate the current year deferral of property taxes.

k. Adjust for the $21,000 of property taxes that was deferred in 2016 and recognized as revenue in the 2017 fund-basis statements.

l. Assume the City adopted a policy in 2017 of allowing employees to accumulate compensated absences. Make an adjustment accruing the expense of $ 42,000 Charge compensated absences expense.

m. Bring in the balances of the internal service fund balance sheet accounts. Again, use a single account for all capital assets and a second account for all accumulated depreciation balances (use a separate column of the worksheet to enter Internal Service Fund entries).

n. No revenues from internal service funds were with external parties. Assume $3,200 of the $11,200 “Due from Other Funds” in the internal service accounts represents a receivable from the General Fund and the remaining $8,000 is due from the enterprise fund. Eliminate the $3,200 interfund receivables.

o. Reduce governmental fund expenses by the net operating profit of internal service funds. As the amount is small, reduce general government expenses for the entire amount.

p. Eliminate transfers that are between departments reported within governmental activities.

 

3. Prepare, in good form, a Statement of Activities for the City of Monroe for the Year Ended December 31, 2017. For purposes of this statement, assume:

· $ 332,000 in the General Fund is a state grant specifically to support general government programs.

· $ 1,065,000 in the Street and Maintenance Fund is an operating grant specifically for Maintenance and street maintenance expenses.

· $ 1,340,000 in the City Jail Construction Fund is a capital grant that applies to public safety.

 

Use the balances computed from the worksheet for the governmental activities portion of the government wide financial statements. Use the solution to the enterprise funds in part 3 of the overall continuous problem to prepare the business activities portion (net any short-term interfund payables/receivables into the line for internal balances).

 

4. Prepare, in good form, a Statement of Net Position for the City of Monroe as of December 31, 2017. Group all capital assets, net of depreciation. Include a breakdown in the Net Position section for the classifications of (a) capital assets, net of related debt, (b) restricted, and (c) unrestricted. For purposes of classifying net position for the governmental activities, assume:

· For the governmental activities net position invested in capital assets, net of related debt, the related debt includes the bonds payable, the premium on bonds payable, and the advance from the water utility fund.

· The special revenue fund resources are restricted by the granting agency for street and maintenance. This is the only restricted balance.

 

5. Prepare the reconciliation necessary to convert from the fund balance reported in the governmental funds Balance Sheet to the net position in the government-wide Statement of Net Position.

 

6. Prepare the reconciliation necessary to convert from the change in fund balances in the governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the change in net position in the government-wide Statement of Activities.

 

 

Eliminate all the textbox notes in order to have a clean set of financial statements to present.