Forest City has recently implemented GAAP reporting and is attempting to determine which of the following special revenue funds should be classified as “major funds” and, therefore, be reported in separate columns on the balance sheet and statement of revenues, expenditures, and changes in fund balances for the governmental funds. As the city’s external auditor, you have been asked to provide a rationale for either including or excluding each of the following funds as a major fund. Determine which of the following funds should be reported as a major fund. **Forest City Financial Overview***As of Fiscal Year-End*This table provides a financial summary for various funds within Forest City. It lists fund-specific data, overall totals for all governmental funds, and combines governmental and enterprise funds. Here’s a detailed breakdown of the information:### Fund Overview1. **Gas Tax Revenue Fund** - **Total Assets:** $180,748 - **Total Liabilities and Deferred Inflows of Resources:** $72,551 - **Total Revenues:** $138,338 - **Total Expenditures:** $124,225 - **Include as a Major Fund?** No2. **Housing and Urban Development Grant Fund** - **Total Assets:** $175,111 - **Total Liabilities and Deferred Inflows of Resources:** $85,433 - **Total Revenues:** $169,964 - **Total Expenditures:** $130,583 - **Include as a Major Fund?** Yes3. **Forest City Library Fund** - **Total Assets:** $101,549 - **Total Liabilities and Deferred Inflows of Resources:** $0 - **Total Revenues:** $120,589 - **Total Expenditures:** $119,812 - **Include as a Major Fund?** No### Aggregate Financial Data- **All Governmental Funds:** - **Total Assets:** $1,583,867 - **Total Liabilities and Deferred Inflows of Resources:** $867,533 - **Total Revenues:** $1,537,399 - **Total Expenditures:** $1,496,223- **All Governmental and Enterprise Funds:** - **Total Assets:** $3,497,398 - **Total Liabilities and Deferred Inflows of Resources:** $1,487,225 - **Total Revenues:** $2,987,487 - **Total Expenditures:** $2,684,531### Diagram AnalysisThe table includes sections for:- **Gas Tax Revenue Fund**- **Housing and Urban Development Grant Fund**- **Forest City Library Fund**- Cumulative data for **All Governmental Funds** and **All Governmental and Enterprise Funds**.Each section provides data on total assets, liabilities, revenues, and expenditures, along with a note on

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Forest City has recently implemented GAAP reporting and is attempting to determine which of the following special revenue funds should be classified as “major funds” and, therefore, be reported in separate columns on the balance sheet and statement of revenues, expenditures, and changes in fund balances for the governmental funds. As the city’s external auditor, you have been asked to provide a rationale for either including or excluding each of the following funds as a major fund. Determine which of the following funds should be reported as a major fund.

**Forest City Financial Overview**

*As of Fiscal Year-End*

This table provides a financial summary for various funds within Forest City. It lists fund-specific data, overall totals for all governmental funds, and combines governmental and enterprise funds. Here’s a detailed breakdown of the information:

### Fund Overview

1. **Gas Tax Revenue Fund**
- **Total Assets:** $180,748
- **Total Liabilities and Deferred Inflows of Resources:** $72,551
- **Total Revenues:** $138,338
- **Total Expenditures:** $124,225
- **Include as a Major Fund?** No

2. **Housing and Urban Development Grant Fund**
- **Total Assets:** $175,111
- **Total Liabilities and Deferred Inflows of Resources:** $85,433
- **Total Revenues:** $169,964
- **Total Expenditures:** $130,583
- **Include as a Major Fund?** Yes

3. **Forest City Library Fund**
- **Total Assets:** $101,549
- **Total Liabilities and Deferred Inflows of Resources:** $0
- **Total Revenues:** $120,589
- **Total Expenditures:** $119,812
- **Include as a Major Fund?** No

### Aggregate Financial Data

- **All Governmental Funds:**
- **Total Assets:** $1,583,867
- **Total Liabilities and Deferred Inflows of Resources:** $867,533
- **Total Revenues:** $1,537,399
- **Total Expenditures:** $1,496,223

- **All Governmental and Enterprise Funds:**
- **Total Assets:** $3,497,398
- **Total Liabilities and Deferred Inflows of Resources:** $1,487,225
- **Total Revenues:** $2,987,487
- **Total Expenditures:** $2,684,531

### Diagram Analysis

The table includes sections for:
- **Gas Tax Revenue Fund**
- **Housing and Urban Development Grant Fund**
- **Forest City Library Fund**
- Cumulative data for **All Governmental Funds** and **All Governmental and Enterprise Funds**.

Each section provides data on total assets, liabilities, revenues, and expenditures, along with a note on

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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