he schedule of capital assets has a significant impact on the reconciliations between fund and government‐wide statements. The schedule that follows pertaining to governmental capital assets was excerpted from the annual report of Urbana, Illinois (with changed dates): A related schedule indicates the following: Capital outlays $ 3,358,611 Depreciation (2,268,579) $ 1,090,032 As required by GASB Statement No. 34, the annual report includes reconciliations between: (1) total fund balance, governmental funds (per the funds statements), and net position of governmental activities (per the government‐wide statements); and (2) net change in fund balance, governmental funds (per the funds statements), and change in net position of governmental activities (per the government‐wide statements). In what way would the data provided in the accompanying schedules be incorporated into the two reconciliations? Be specific. The amount deleted from the equipment account ($452,194) exactly equals the amount deleted from the related accumulated depreciation account. Is this merely a coincidence? Would the amounts always be the same? Based simply on the amount of equipment retired, what would you estimate to be the average useful life of the equipment? Is this reasonable? Balance June 30, 2020 Additions Deletions Balance June 30, 2021 Land (not depreciated) $ 2,843,487 $ 128,528 — $ 2,972,015 Capital assets being depreciated: Buildings and improvements 8,956,049 188,399 — 9,144,448 Accumulated depreciation (1,991,173) (159,402) — (2,150,575) Buildings and improvements (net) 6,964,876 28,997 — 6,993,873 Equipment 7,760,379 1,123,568 $ 452,194 8,431,753 Accumulated depreciation (3,775,555) (904,509) (452,194) (4,227,870) Equipment (net) 3,984,824 219,059 — 4,203,883 Infrastructure 39,983,947 1,918,116 — 41,902,063 Accumulated depreciation (8,935,986) (1,204,668) — (10,140,654) Infrastructure (net) 31,047,961 713,448 — 31,761,409 Total, governmental activities $44,841,148 $1,090,032 — $45,931,180

he schedule of capital assets has a significant impact on the reconciliations between fund and government‐wide statements. The schedule that follows pertaining to governmental capital assets was excerpted from the annual report of Urbana, Illinois (with changed dates): A related schedule indicates the following: Capital outlays $ 3,358,611 Depreciation (2,268,579) $ 1,090,032 As required by GASB Statement No. 34, the annual report includes reconciliations between: (1) total fund balance, governmental funds (per the funds statements), and net position of governmental activities (per the government‐wide statements); and (2) net change in fund balance, governmental funds (per the funds statements), and change in net position of governmental activities (per the government‐wide statements). In what way would the data provided in the accompanying schedules be incorporated into the two reconciliations? Be specific. The amount deleted from the equipment account ($452,194) exactly equals the amount deleted from the related accumulated depreciation account. Is this merely a coincidence? Would the amounts always be the same? Based simply on the amount of equipment retired, what would you estimate to be the average useful life of the equipment? Is this reasonable? Balance June 30, 2020 Additions Deletions Balance June 30, 2021 Land (not depreciated) $ 2,843,487 $ 128,528 — $ 2,972,015 Capital assets being depreciated: Buildings and improvements 8,956,049 188,399 — 9,144,448 Accumulated depreciation (1,991,173) (159,402) — (2,150,575) Buildings and improvements (net) 6,964,876 28,997 — 6,993,873 Equipment 7,760,379 1,123,568 $ 452,194 8,431,753 Accumulated depreciation (3,775,555) (904,509) (452,194) (4,227,870) Equipment (net) 3,984,824 219,059 — 4,203,883 Infrastructure 39,983,947 1,918,116 — 41,902,063 Accumulated depreciation (8,935,986) (1,204,668) — (10,140,654) Infrastructure (net) 31,047,961 713,448 — 31,761,409 Total, governmental activities $44,841,148 $1,090,032 — $45,931,180

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The schedule of capital assets has a significant impact on the reconciliations between fund and government‐wide statements.

The schedule that follows pertaining to governmental capital assets was excerpted from the annual report of Urbana, Illinois (with changed dates):

A related schedule indicates the following:

Capital outlays	$ 3,358,611
Depreciation	(2,268,579)
	$ 1,090,032

As required by GASB Statement No. 34, the annual report includes reconciliations between: (1) total fund balance, governmental funds (per the funds statements), and net position of governmental activities (per the government‐wide statements); and (2) net change in fund balance, governmental funds (per the funds statements), and change in net position of governmental activities (per the government‐wide statements). In what way would the data provided in the accompanying schedules be incorporated into the two reconciliations? Be specific.
The amount deleted from the equipment account ($452,194) exactly equals the amount deleted from the related accumulated depreciation account. Is this merely a coincidence? Would the amounts always be the same?

Based simply on the amount of equipment retired, what would you estimate to be the average useful life of the equipment? Is this reasonable?

	Balance June 30, 2020	Additions	Deletions	Balance June 30, 2021
Land (not depreciated)	$ 2,843,487	$ 128,528	—	$ 2,972,015
Capital assets being depreciated:
Buildings and improvements	8,956,049	188,399	—	9,144,448
Accumulated depreciation	(1,991,173)	(159,402)	—	(2,150,575)
Buildings and improvements (net)	6,964,876	28,997	—	6,993,873
Equipment	7,760,379	1,123,568	$ 452,194	8,431,753
Accumulated depreciation	(3,775,555)	(904,509)	(452,194)	(4,227,870)
Equipment (net)	3,984,824	219,059	—	4,203,883
Infrastructure	39,983,947	1,918,116	—	41,902,063
Accumulated depreciation	(8,935,986)	(1,204,668)	—	(10,140,654)
Infrastructure (net)	31,047,961	713,448	—	31,761,409
Total, governmental activities	$44,841,148	$1,090,032	—	$45,931,180

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