For the past two editions of the textbook, this case has followed the financial condition of Detroit, Michigan. As this text goes to print, Detroit has emerged from bankruptcy and in accordance with Michigan Public Act 181 of 2014, it is currently monitored by the Detroit Financial Review Commission for compliance with the Plan of Adjustment. In the 2016 CAFR, Detroit indicates that its debt rating has actually been upgraded from the time the last edition of the textbook was published, when its debt had received a junk bond rating of Caa2 from Moody’s.

Currently the debt is rated as B2, which puts the uninsured debt in the below investment grade category. The audit of the 2015–2016 financial reports, conducted by Plante and Moran, provided Detroit with an unmodified opinion. As discussed in the MD&A, Detroit is making progress toward a sounder financial footing. Bonded debt decreased by $5.8 billion in the fiscal year as a result of eliminated, restructured, and new debt associated with the bankruptcy restructuring.

Use the information from the table of selected 10-year trend data and the Detroit CAFR report for the year ended June 30, 2016 to complete this assignment.

	Selected 10-Year Trend Data from Detrolt's CAFRs
Measure	2016	2015	2014	2013	2012	2011	2010	2009	2008	2007
Cash and cash equivalents	$595	$652	$534	$82	$82	$123	$81	$116	$268	$59
Current liabilities	$343	$384	$747	$521	$1,038	$818	$871	$823	$858	$726
General Fund balances	$501	$438	$53	($73)	($269)	($148)	($91)	($267)	($142)	($91)
Governmental fund total revenues	$1,353	$1,378	$1,422	$1,370	$1,524	$1,712	$1,630	$1,748	$1,773	$1,910
Governmental fund total expenditures	$1,146	$1,506	$1,326	$1,311	$1,586	$1,711	$1,665	$1,843	$1,908	$1,870
Debt per capita	$2,114	$2,229	$3,041	$3,023	$2,961	$3,089	$2,301	$2,074	$2,195	$2,137
Legal debt limit used	34.49%	56.86%	65.17%	66.69%	92.65%	84.82%	75.46%	59.10%	54.50%	49.67%
Debt service/operating expenditures	13.53%	18.30%	19.28%	20.19%	15.10%	13.70%	13.39%	14.41%	13.97%	13.00%

Required

After completing your trend analysis in part a and providing your opinion in part b, refer to the section entitled Analyzing Government-wide Financial Statements. At the end of that section, a number of warning indicators concerning fiscal distress are listed. Using indicators from that list, does your opinion in b change? Why or why not?

Electronic Municipal Market Access (EMMA) provides investors and others interested in state and local government debt and financial information an excellent resource. By accessing EMMA, an individual is able to learn about what type of debt is outstanding for a government of interest, and he/she also is able to learn about the debt’s characteristics along with the financial performance of the entity. Access EMMA and use the Education and Browse Issuers sections to complete this case.

Required

Access the MSRB Education Center and go to the For Investors section to help answer the following questions:

1. What is an official statement, and what financial information is required in the official statement?
2. What are three factors to consider in assessing a bond’s default risk?

Identify factors that the rating agencies use in determining bond ratings. Which of the factors identified is beyond management control and how could this factor affect the government’s finances?

What type of benchmarking is most common in governments? Why?

The GASB indicates that economic condition is composed of three components. Identify and define the three components of economic condition.

From the following Company Y adjusted trial balance, prepare simple financial statements, as follows:

A. Income Statement

For the past two editions of the textbook, this case has followed the financial condition of Detroit, Michigan. As this text goes to print, Detroit has emerged from bankruptcy and in accordance with Michigan Public Act 181 of 2014, it is currently monitored by the Detroit Financial Review Commission for compliance with the Plan of Adjustment. In the 2016 CAFR, Detroit indicates that its debt rating has actually been upgraded from the time the last edition of the textbook was published, when its debt had received a junk bond rating of Caa2 from Moody’s.

Currently the debt is rated as B2, which puts the uninsured debt in the below investment grade category. The audit of the 2015–2016 financial reports, conducted by Plante and Moran, provided Detroit with an unmodified opinion. As discussed in the MD&A, Detroit is making progress toward a sounder financial footing. Bonded debt decreased by $5.8 billion in the fiscal year as a result of eliminated, restructured, and new debt associated with the bankruptcy restructuring.

Use the information from the table of selected 10-year trend data and the Detroit CAFR report for the year ended June 30, 2016 to complete this assignment.

Required

Based on your analysis, do you agree with the auditor’s unmodified report (i.e., you see nothing that would indicate a going-concern issue)?

Galaxy Theater Production Company's partially completed worksheet as of December 31, 2018, follows.

Adjustment data at December 31 follow:

• a. As of December 31, Galaxy had performed $900 of service revenue but has not yet billed customers.
• b. At the end of the month, Galaxy had$500 of office supplies remaining.
• c. Prepaid Insurance of $600 remained.
• d. Depreciation expense,$4,200.
• e. Accrued salaries expense of $150 that hasn't been paid yet.

Requirements

1. Complete the worksheet. Use letters a through e to label the five adjustments.
2. Journalize the adjusting entries.

Find the class boundaries, midpoints, and widths for each class. \

$$125-131$$

All cells contain an enzyme called peptidyl-tRNA hydrolase, and cells that are deficient in the enzyme grow very slowly. What is the probable function of the enzyme and why is it necessary?

Kenseth Corporation’s unadjusted trial balance at December 1, 2014, is presented below.

$$\begin{array}{lccc} &\underline{\textbf{Debit}}&\underline{\textbf{Credit}}\\[5pt] \text{Cash}&\text{\$\hspace{14pt}22,000}\\ \text{Accounts Receivable}&\text{\hspace{19pt}36,800}\\ \text{Notes Receivable}&\text{\hspace{19pt}10,000}\\ \text{Interest Receivable}&\text{\hspace{42pt}0}\\ \text{Inventory}&\text{\hspace{19pt}36,200}\\ \text{Prepaid Insurance}&\text{\hspace{24pt}3,600}\\ \text{Land}&\text{\hspace{19pt}20,000}\\ \text{Buildings}&\text{\hspace{14pt}150,000}\\ \text{Equipment}&\text{\hspace{19pt}60,000}\\ \text{Patent}&\text{\hspace{24pt}9,000}\\ \text{Allowance for Doubtful Accounts}&&\text{\$\hspace{27pt}500}\\ \text{Accumulated Depreciation—Buildings}&&\text{\hspace{19pt}50,000}\\ \text{Accumulated Depreciation—Equipment}&&\text{\hspace{19pt}24,000}\\ \text{Accounts Payable}&&\text{\hspace{19pt}27,300}\\ \text{Salaries and Wages Payable}&&\text{\hspace{42pt}0}\\ \text{Notes Payable (due April 30, 2015)}&&\text{\hspace{19pt}11,000}\\ \text{Income Taxes Payable}&&\text{\hspace{42pt}0}\\ \text{Interest Payable}&&\text{\hspace{42pt}0}\\ \text{Notes Payable (due in 2020)}&&\text{\hspace{19pt}35,000}\\ \text{Common Stock}&&\text{\hspace{19pt}50,000}\\ \text{Retained Earnings}&&\text{\hspace{19pt}63,600}\\ \text{Dividends}&\text{\hspace{19pt}12,000}\\ \text{Sales Revenue}&&\text{\hspace{14pt}900,000}\\ \text{Interest Revenue}&&\text{\hspace{42pt}0}\\ \text{Gain on Disposal of Plant Assets}&&\text{\hspace{42pt}0}\\ \text{Bad Debt Expense}&\text{\hspace{42pt}0}\\ \text{Cost of Goods Sold}&\text{\hspace{14pt}630,000}\\ \text{Depreciation Expense}&\text{\hspace{42pt}0}\\ \text{Income Tax Expense}&\text{\hspace{42pt}0}\\ \text{Insurance Expense}&\text{\hspace{42pt}0}\\ \text{Interest Expense}&\text{\hspace{42pt}0}\\ \text{Other Operating Expenses}&\text{\hspace{19pt}61,800}\\ \text{Amortization Expense}&\text{\hspace{42pt}0}\\ \text{Salaries and Wages Expense}&\underline{\text{\hspace{14pt}110,000}}&\underline{\text{\hspace{45pt}}}\\ \text{Total}&\underline{\underline{\text{\$\hspace{1pt}1,161,400}}}&\underline{\underline{\text{\$\hspace{1pt}1,161,400}}}\\ \end{array}$$

The following transactions occurred during December.

Dec.  2 Purchased equipment for $16,000, plus sales taxes of$800 (paid in cash).
      2 Kenseth sold for $3,500 equipment which originally cost$5,000. Accumulated depreciation on this equipment at January 1, 2014, was $1,800; 2014 depreciation prior to the sale of equipment was$825.
     15 Kenseth sold for $5,000 on account inventory that cost$3,500.
     23 Salaries and wages of $6,600 were paid.

Adjustment data:

1. Kenseth estimates that uncollectible accounts receivable at year-end are$4,000.
2. The note receivable is a one-year, 8% note dated April 1, 2014. No interest has been recorded.
3. The balance in prepaid insurance represents payment of a $3,600, 6-month premium on September 1, 2014.
4. The building is being depreciated using the straight-line method over 30 years. The salvage value is$30,000.
5. The equipment owned prior to this year is being depreciated using the straight-line method over 5 years. The salvage value is 10% of cost.
6. The equipment purchased on December 2, 2014, is being depreciated using the straight-line method over 5 years, with a salvage value of $1,800.
7. The patent was acquired on January 1, 2014, and has a useful life of 9 years from that date.
8. Unpaid salaries at December 31, 2014, total$2,200.
9. Both the short-term and long-term notes payable are dated January 1, 2014, and carry a 10% interest rate. All interest is payable in the next 12 months.
10. Income tax expense was $15,000. It was unpaid at December 31.

Instructions

(a) Prepare journal entries for the transactions listed above and adjusting entries.

For the past two editions of the textbook, this case has followed the financial condition of Detroit, Michigan. As this text goes to print, Detroit has emerged from bankruptcy and in accordance with Michigan Public Act 181 of 2014, it is currently monitored by the Detroit Financial Review Commission for compliance with the Plan of Adjustment. In the 2016 CAFR, Detroit indicates that its debt rating has actually been upgraded from the time the last edition of the textbook was published, when its debt had received a junk bond rating of Caa2 from Moody’s.

Currently the debt is rated as B2, which puts the uninsured debt in the below investment grade category. The audit of the 2015–2016 financial reports, conducted by Plante and Moran, provided Detroit with an unmodified opinion. As discussed in the MD&A, Detroit is making progress toward a sounder financial footing. Bonded debt decreased by $5.8 billion in the fiscal year as a result of eliminated, restructured, and new debt associated with the bankruptcy restructuring.

Use the information from the table of selected 10-year trend data and the Detroit CAFR report for the year ended June 30, 2016 to complete this assignment.

Required

Use the previous Illustrations from this book to determine relevant ratios to construct from the above trend data. From the ratios you construct and the other trend data in the statistical section of the CAFR, evaluate the financial condition of Detroit as of June 30, 2016. Provide a brief write-up of your analysis.

The worksheet of Best Jobs Employment Service follows but is incomplete.

The following data at April 30, 2018, are given for Best Jobs Employment Service:

• a. Service revenue accrued, $700.
• b. Office supplies used,$300.
• c. Depreciation on equipment, $1,300.
• d. Salaries owed to employees,$1,400.

Requirements

1. Calculate and enter the adjustment amounts directly in the Adjustments columns. Use letters *a *through d to label the four adjustments.
2. Calculate and enter the adjusted account balances in the Adjusted Trial Balance columns.
3. Prepare each adjusting journal entry calculated in Requirement 1. D ate the entries, and include explanations.

Which digestive enzymes are active at a site different from the site where they are produced? ____________________