However, conducting a financial statement analysis does provide a better understanding of the federal government to assist in the financial statement analysis, use Illustration 17-2 and Illustration 17-3 along with the following excerpts from the 2019 Financial Report of the United States Government. (Hint: When using revenues or net costs, use the consolidated amounts, which are adjusted for intra- entity activity) UNITED STATES GOVERNMENT Statements of Changes in Cash Balance from Budget and Other Activities For the Years Ended September 30, 2019, and 2018 (In billions of dollars) Cash flow from budget activities Total budget receipts Total budget out lays Budget deficit Adjustments for non-cash outlays included in the budget Non-cash flow amounts in the budget related to federal debt securities Accrued interest Net amortization Other Subtotal adjustments for non-cash flow amounts in the budget related to federal debt securities Non-cash flow amounts in the budget related to loan financing account activity Interest revenue on uninvested funds 2019 Reclass 2018 3,462.2 3,328.7 (4,446.6) (4,107.7) (984.4) (779.0) 305.5 268.5 65.7 41.9 (33.3) 1.1 337.9 311.5 7.1 7.9 Interest expense on entity borrowings (43.2) (42.1) Entities downward reestimates/negative subsidy payments Entities subsidy expense/upward reestimates (22.8) (37.3) 47.7 35.8 Subtotal adjustments for non-cash flow amounts in the budget related to loan financing account activity (11.2) (35.7) Total of adjustments for non-cash outlays included in the budget Cash flow from activities not included in the budget 326.7 275.8 Cash flow from non-budget activities related to federal debt securities Interest paid (305.7). (268.4) Subtotal cash flow from non-budget activities related to federal debt (305.7) (260.4) securities Cash flow from non-budget activities related to loan financing account activity Loan disbursements/default payments Fees (214.3) (194.9) 24.5 25.0 Principal & interest repayments 125.9 117.7 Other collections on defaulted loans receivable and sale of foreclosed property Other loan financing account activities 4.5 5.7 8.6 Subtotal cash flow from non-budget activities related to loan financing account activity (59.4) (45.9) Cash flow from financing federal debt securities Borrowings Repayments Discount/premium 11,813.4 (10,732.1) (68.4) 10,088.1 (8,993.5) 154.7) Subtotal cash flow from financing federal debt securities Total cash flow from activities not included in the budget Other Total other Change in cash and other monetary assets balance Beginning cash and other monetary assets balance Ending cash and other monetary assets balance 1,020.9 655.8 1,031.9 725.6 19.8 13.9 17.1 236.3 507.5 271.2 524.6 507.5 Buildings, structures, and facilities Furniture, fixtures, and equipment Construction in progress Internal use software Land Other property, plant, and equipment Total property, plant, and equipment Required Property, Plant, and Equipment, Net As of September 30, 2019, and 2018 (In billions of dollars) Accumulated Depreciation/ Accumulated Depreciation/ Cost Amortization Net Cost Amortization Net 775.8 1,387.5 2019 469.7 2018 306.1 728.4 431.1 297.3 809.5 578.0 1,363.9 782.7 581.2 171.6 N/A 171.6 159.5 N/A 159.5 51.5 32.1 19.4 49.4 30.8 18.6 21.7 N/A 21.7 21.5 N/A 21.5 31.7 2,439.8 21.6 10.1 38.0 25.6 12.4 1,332.9 1,106.9 2,360.7 1,270.2 1,090.5 a. To provide an indication of the government's financial capability, answer the following: (1) What percentage of total revenues comes from individual income taxes and withholdings? (2) What is the debt service as calculated by the ratio of principal and interest payments on debt held by the public to total revenue? b. To provide an indication of the government's financial performance, answer the following: (1) What is interperiod equity, as calculated by the ratio of revenue to net costs? c. To provide an indication of the government's financial position, answer the following (1) What is the ratio of nondedicated collections funds to total revenue? (2) What is the quick ratio (use known current liabilities in the calculation)? (3) What is the capital asset condition as calculated by the ratio of accumulated depreciation to the cost of depreciable capital assets?

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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However, conducting a financial statement analysis does provide a better understanding of the federal government to assist in the
financial statement analysis, use Illustration 17-2 and Illustration 17-3 along with the following excerpts from the 2019 Financial Report
of the United States Government. (Hint: When using revenues or net costs, use the consolidated amounts, which are adjusted for intra-
entity activity)
UNITED STATES GOVERNMENT
Statements of Changes in Cash Balance from Budget and Other Activities
For the Years Ended September 30, 2019, and 2018
(In billions of dollars)
Cash flow from budget activities
Total budget receipts
Total budget out lays
Budget deficit
Adjustments for non-cash outlays included in the budget
Non-cash flow amounts in the budget related to federal debt securities
Accrued interest
Net amortization
Other
Subtotal adjustments for non-cash flow amounts in the budget related to federal
debt securities
Non-cash flow amounts in the budget related to loan financing account activity
Interest revenue on uninvested funds
2019
Reclass
2018
3,462.2
3,328.7
(4,446.6)
(4,107.7)
(984.4)
(779.0)
305.5
268.5
65.7
41.9
(33.3)
1.1
337.9
311.5
7.1
7.9
Interest expense on entity borrowings
(43.2)
(42.1)
Entities downward reestimates/negative subsidy payments
Entities subsidy expense/upward reestimates
(22.8)
(37.3)
47.7
35.8
Subtotal
adjustments for non-cash flow amounts in the budget related to loan
financing account activity
(11.2)
(35.7)
Total of adjustments for non-cash outlays included in the budget
Cash flow from activities not included in the budget
326.7
275.8
Cash flow from non-budget activities related to federal debt securities
Interest paid
(305.7).
(268.4)
Subtotal cash flow from non-budget activities related to federal debt
(305.7)
(260.4)
securities
Cash flow from non-budget activities related to loan financing account activity
Loan disbursements/default payments
Fees
(214.3)
(194.9)
24.5
25.0
Principal & interest repayments
125.9
117.7
Other collections on defaulted loans receivable and sale of foreclosed property
Other loan financing account activities
4.5
5.7
8.6
Subtotal cash flow from non-budget activities related to loan financing account
activity
(59.4)
(45.9)
Cash flow from financing federal debt securities
Borrowings
Repayments
Discount/premium
11,813.4
(10,732.1)
(68.4)
10,088.1
(8,993.5)
154.7)
Subtotal cash flow from financing federal debt securities
Total cash flow from activities not included in the budget
Other
Total other
Change in cash and other monetary assets balance
Beginning cash and other monetary assets balance
Ending cash and other monetary assets balance
1,020.9
655.8
1,031.9
725.6
19.8
13.9
17.1
236.3
507.5
271.2
524.6
507.5
Buildings, structures, and facilities
Furniture, fixtures, and equipment
Construction in progress
Internal use software
Land
Other property, plant, and equipment
Total property, plant, and equipment
Required
Property, Plant, and Equipment, Net
As of September 30, 2019, and 2018
(In billions of dollars)
Accumulated
Depreciation/
Accumulated
Depreciation/
Cost
Amortization
Net
Cost
Amortization
Net
775.8
1,387.5
2019
469.7
2018
306.1
728.4
431.1
297.3
809.5
578.0
1,363.9
782.7
581.2
171.6
N/A
171.6
159.5
N/A
159.5
51.5
32.1
19.4
49.4
30.8
18.6
21.7
N/A
21.7
21.5
N/A
21.5
31.7
2,439.8
21.6
10.1
38.0
25.6
12.4
1,332.9
1,106.9
2,360.7
1,270.2
1,090.5
a. To provide an indication of the government's financial capability, answer the following:
(1) What percentage of total revenues comes from individual income taxes and withholdings?
(2) What is the debt service as calculated by the ratio of principal and interest payments on debt held by the public to total revenue?
b. To provide an indication of the government's financial performance, answer the following:
(1) What is interperiod equity, as calculated by the ratio of revenue to net costs?
c. To provide an indication of the government's financial position, answer the following
(1) What is the ratio of nondedicated collections funds to total revenue?
(2) What is the quick ratio (use known current liabilities in the calculation)?
(3) What is the capital asset condition as calculated by the ratio of accumulated depreciation to the cost of depreciable capital
assets?
Transcribed Image Text:However, conducting a financial statement analysis does provide a better understanding of the federal government to assist in the financial statement analysis, use Illustration 17-2 and Illustration 17-3 along with the following excerpts from the 2019 Financial Report of the United States Government. (Hint: When using revenues or net costs, use the consolidated amounts, which are adjusted for intra- entity activity) UNITED STATES GOVERNMENT Statements of Changes in Cash Balance from Budget and Other Activities For the Years Ended September 30, 2019, and 2018 (In billions of dollars) Cash flow from budget activities Total budget receipts Total budget out lays Budget deficit Adjustments for non-cash outlays included in the budget Non-cash flow amounts in the budget related to federal debt securities Accrued interest Net amortization Other Subtotal adjustments for non-cash flow amounts in the budget related to federal debt securities Non-cash flow amounts in the budget related to loan financing account activity Interest revenue on uninvested funds 2019 Reclass 2018 3,462.2 3,328.7 (4,446.6) (4,107.7) (984.4) (779.0) 305.5 268.5 65.7 41.9 (33.3) 1.1 337.9 311.5 7.1 7.9 Interest expense on entity borrowings (43.2) (42.1) Entities downward reestimates/negative subsidy payments Entities subsidy expense/upward reestimates (22.8) (37.3) 47.7 35.8 Subtotal adjustments for non-cash flow amounts in the budget related to loan financing account activity (11.2) (35.7) Total of adjustments for non-cash outlays included in the budget Cash flow from activities not included in the budget 326.7 275.8 Cash flow from non-budget activities related to federal debt securities Interest paid (305.7). (268.4) Subtotal cash flow from non-budget activities related to federal debt (305.7) (260.4) securities Cash flow from non-budget activities related to loan financing account activity Loan disbursements/default payments Fees (214.3) (194.9) 24.5 25.0 Principal & interest repayments 125.9 117.7 Other collections on defaulted loans receivable and sale of foreclosed property Other loan financing account activities 4.5 5.7 8.6 Subtotal cash flow from non-budget activities related to loan financing account activity (59.4) (45.9) Cash flow from financing federal debt securities Borrowings Repayments Discount/premium 11,813.4 (10,732.1) (68.4) 10,088.1 (8,993.5) 154.7) Subtotal cash flow from financing federal debt securities Total cash flow from activities not included in the budget Other Total other Change in cash and other monetary assets balance Beginning cash and other monetary assets balance Ending cash and other monetary assets balance 1,020.9 655.8 1,031.9 725.6 19.8 13.9 17.1 236.3 507.5 271.2 524.6 507.5 Buildings, structures, and facilities Furniture, fixtures, and equipment Construction in progress Internal use software Land Other property, plant, and equipment Total property, plant, and equipment Required Property, Plant, and Equipment, Net As of September 30, 2019, and 2018 (In billions of dollars) Accumulated Depreciation/ Accumulated Depreciation/ Cost Amortization Net Cost Amortization Net 775.8 1,387.5 2019 469.7 2018 306.1 728.4 431.1 297.3 809.5 578.0 1,363.9 782.7 581.2 171.6 N/A 171.6 159.5 N/A 159.5 51.5 32.1 19.4 49.4 30.8 18.6 21.7 N/A 21.7 21.5 N/A 21.5 31.7 2,439.8 21.6 10.1 38.0 25.6 12.4 1,332.9 1,106.9 2,360.7 1,270.2 1,090.5 a. To provide an indication of the government's financial capability, answer the following: (1) What percentage of total revenues comes from individual income taxes and withholdings? (2) What is the debt service as calculated by the ratio of principal and interest payments on debt held by the public to total revenue? b. To provide an indication of the government's financial performance, answer the following: (1) What is interperiod equity, as calculated by the ratio of revenue to net costs? c. To provide an indication of the government's financial position, answer the following (1) What is the ratio of nondedicated collections funds to total revenue? (2) What is the quick ratio (use known current liabilities in the calculation)? (3) What is the capital asset condition as calculated by the ratio of accumulated depreciation to the cost of depreciable capital assets?
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