The governmental funds of the City of Westchester report $445,000 in assets and$140,000 in liabilities. The following are some of the assets that the government reports.

• Prepaid items—$7,000
• Cash from a bond issuance that must be spent within the school system according to the bond indenture—$80,000
• Supplies—$5,000
• Investments given by a citizen that will be sold soon with the proceeds used to beautify a public park—$33,000
• Cash that the assistant director of finance designated for use in upgrading the local roads—$40,000
• Cash from a state grant that must be spent to supplement the pay of local kindergarten teachers—$53,000
• Cash that the city council (the highest level of decision-making authority in the government) voted to use in renovating a school gymnasium—$62,000

On a balance sheet for the governmental funds, what fund balance value should the City of Westchester report?

A city orders a new computer for its police department that is recorded within its general fund. The computer has an anticipated amount of $88,000. Its actual cost when received is$89,400. Payment is subsequently made. Prepare all required journal entries for both fund and government-wide financial statements. What information is found on the fund financial statements? What information is found on the government-wide financial statements?

A government expects to collect revenues of $400,000 but has approved expenditures of$430,000. The anticipated shortage will have an impact on which of the following?
a. Interperiod equity
b. Modified accrual accounting
c. Consumption accounting
d. Account groups

During the current year, the City of Jones buys land for $80,000. Which of the statement is not a possibility?
a. The land could be reported as an asset by the business-type activities in the government-wide financial statements.
b. The land could be reported as an asset by the governmental activities in the government-wide financial statements.
c. The land could be reported as an asset by the proprietary funds in the fund financial statements.
d. The land could be reported as an asset by the governmental funds in the fund financial statements.

The board of commissioners of the City of Hartmoore adopts a general fund budget for the year ending June 30, 2020. It includes revenues of $1,000,000, bond proceeds of$400,000, appropriations of $900,000, and operating transfers out of$300,000. If this budget is formally integrated into the accounting records, what journal entry is required at the beginning of the year? What later entry is needed?

Assume that the City of Coyote has produced its financial statements for December 31, 2020, and the year then ended. The city’s general fund was only used to monitor education and parks. Its capital projects funds worked in connection with each of these functions at times during the current year. The city also maintained an enterprise fund to account for its art museum.
 The government-wide financial statements provide the following figures:

• Education reports net expenses of $600,000.
• Parks reports net expenses of$100,000.
• Art museum reports net revenues of $50,000.
• General government revenues for the year were$800,000 with an overall increase in the city’s net position of $150,000.

The fund financial statements provide the following for the entire year:

• The general fund reports a$30,000 increase in its fund balance.
• The capital projects fund reports a $40,000 increase in its fund balance.
• The enterprise fund reports a$60,000 increase in its net position.

The city asks the CPA firm of Abernethy and Chapman to examine several transactions that occurred during 2020 and indicate how to correct any erroneous reporting. Officials also want to know the effect of each error. View each of the following scenarios as independent.

The City of Coyote mails property tax bills for 2021 to its citizens during August 2020. Property owners could make payments early to receive a discount. The levy becomes legally enforceable on February 15, 2021. All money received by the city must be spent during 2021 or later. The total assessment is $300,000. Of that amount, the city collects 40 percent, less a 10 percent discount, in 2020. The city expects to receive all of the remaining money during 2021 with no discount. During 2020, the government increases cash as well as revenue for the amount received. No change was made in creating government-wide financial statements.
a. What is the correct overall change in the city’s net position as should be shown on the government-wide financial statements?
b. What is the correct change for 2020 in the fund balance reported for the city’s general fund?

Assume that the City of Coyote has produced its financial statements for December 31, 2020, and the year then ended. The city’s general fund was only used to monitor education and parks. Its capital projects funds worked in connection with each of these functions at times during the current year. The city also maintained an enterprise fund to account for its art museum.
 The government-wide financial statements provide the following figures:

• Education reports net expenses of $600,000.
• Parks reports net expenses of$100,000.
• Art museum reports net revenues of $50,000.
• General government revenues for the year were$800,000 with an overall increase in the city’s net position of $150,000.

The fund financial statements provide the following for the entire year:

• The general fund reports a$30,000 increase in its fund balance.
• The capital projects fund reports a $40,000 increase in its fund balance.
• The enterprise fund reports a$60,000 increase in its net position.

The city asks the CPA firm of Abernethy and Chapman to examine several transactions that occurred during 2020 and indicate how to correct any erroneous reporting. Officials also want to know the effect of each error. View each of the following scenarios as independent.

During 2020, the City of Coyote received $10,000, which was recorded as a general revenue in the general fund. It was actually a program revenue earned by the city’s park program.
a. What was the correct overall change for 2020 in the net position reported on the governmentwide financial statements?
b. In the general information, the parks program reported net expenses for the period of$100,000. What was the correct amount of net expenses that should have been reported by the parks program?

Assume that the City of Coyote has produced its financial statements for December 31, 2020, and the year then ended. The city’s general fund was only used to monitor education and parks. Its capital projects funds worked in connection with each of these functions at times during the current year. The city also maintained an enterprise fund to account for its art museum.
 The government-wide financial statements provide the following figures:

• Education reports net expenses of $600,000.
• Parks reports net expenses of$100,000.
• Art museum reports net revenues of $50,000.
• General government revenues for the year were$800,000 with an overall increase in the city’s net position of $150,000.

The fund financial statements provide the following for the entire year:

• The general fund reports a$30,000 increase in its fund balance.
• The capital projects fund reports a $40,000 increase in its fund balance.
• The enterprise fund reports a$60,000 increase in its net position.

The city asks the CPA firm of Abernethy and Chapman to examine several transactions that occurred during 2020 and indicate how to correct any erroneous reporting. Officials also want to know the effect of each error. View each of the following scenarios as independent.

In 2020, the City of Coyote receives a $320,000 cash grant from the state to reduce air pollution. Although a special revenue fund could have been set up, the money remains in the general fund. The cash was received immediately but will have to be returned if the city does not lower its air pollution by 25 percent by 2024. On December 31, 2020, Coyote spends$210,000 of the money for a large machine to help begin the process of reducing air pollution. City officials expect the machine to last for five years. The city recorded the cost as an expenditure in the general fund but as an asset on the government-wide financial statements, where it was depreciated based on the straight-line method and the half-year convention. Because the city received the money, it recorded all $320,000 as a revenue on both the fund and the government-wide financial statements.
a. What was the correct change for 2020 in the total fund balance reported by the general fund?
b. What was the correct overall change in the net position reported on the government-wide financial statements?

Chesterfield County had the following transactions. Prepare the entries first for fund financial statements followed by entries for government-wide financial statements.
a. A budget is passed for all ongoing activities. Revenue is anticipated to be $834,000, with approved spending of$540,000 and operating transfers out of $242,000.
b. A contract is signed with a construction company to build a new central office building for the government at a cost of$8 million. The county previously recorded the budget for this project.
c. Bonds are issued for $8 million (face value) to finance construction of the new office building.
d. The new building is completed. An invoice for$8 million is received by the county and paid.
e. Previously unrestricted cash of $1 million is set aside by county officials to begin paying the bonds issued in (c).
f. A portion of the bonds comes due, and$1 million is paid. Of this total, $100,000 represents interest. The interest had not been previously accrued.
g. Property tax levies are assessed. Total billing for this tax is$800,000. On this date, the assessment is a legally enforceable claim according to the laws of the state. All money to be received is designated for the current period, and 90 percent is assumed to be collectible in this period. Receipt of an additional 6 percent is not expected until the subsequent period but in time to be available to pay current period claims. The remaining amount is viewed as uncollectible.
h. The county collects cash of $120,000 from a toll road. The money is restricted for highway maintenance.
i. The county receives stock investments valued at$300,000 as a donation from a grateful citizen. The investments are to be held permanently, but any income from these investments must be used to beautify local parks.

The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation:

a. Liquidation expenses are estimated to be $15,000. Create a predistribution schedule to guide the distribution of cash.
b. Assume that assets costing$74,000 are sold for $60,000. How is the available cash to be divided?

The board of commissioners of the City of Hartmoore adopted a general fund budget for the year ending June 30, 2017, that included revenues of $1,000,000, bond proceeds of$400,000, appropriations of $900,000, and operating transfers out of$300,000. If this budget is formally integrated into the accounting records, what journal entry is required at the beginning of the year? What later entry is required?

The board of commissioners of the City of Hartmoore adopted a General Fund budget for the year ending June 30,2013 , that included revenues of $\$ 1,000,000$, bond proceeds of $\$ 400,000$, appropriations of $\$ 900,000$, and operating transfers out of $\$ 300,000$. If this budget is formally integrated into the accounting records, what journal entry is required at the beginning of the year? What later entry is required?

The City of Frost has a 20-year debt outstanding. On the last day of the current year, this debt has an outstanding balance of $4.8 million, and five years stay until it comes due. On the current date, the debt is paid off early for$5 million. A new debt is issued (with a lower interest rate) for $5.4 million. How is the$200,000 difference between the amount paid and the outstanding balance of $4.8 million included on government-wide financial statements?

a. As an expense
b. As a reduction in liabilities
c. As a deferred outflow of resources on the statement of net position
d. As an asset on the statement of net position

A city issues a 60-day tax anticipation note to fund operations until the collection of sufficient tax money. How does the city classify this liability?
a. The liability should be reported in the government-wide financial statements, whereas an other financing source should be shown in the fund financial statements.
b. A liability should be reported in both the government-wide financial statements and the fund financial statements.
c. An other financing source should be shown in both the government-wide financial statements and the fund financial statements.
d. An other financing source should be shown in the government-wide financial statements, whereas a liability is reported in the fund financial statements.