9-12.The fund-basis financial statements of Cherokee Library District (a special-purpose government engaged only in governmental activities) have been completed for the year 2020 and appear in the second and third tabs of the Excel spreadsheet provided with this exercise. The following information is also available:a. Capital AssetsCapital assets purchased in previous years through governmental-type funds total $21,050,000 and had accumulated depreciation of $5,770,000.Depreciation on capital assets used in governmental-type activities amounted to $434,000 for 2020.No capital assets were sold or disposed of in 2020, and all purchases are properly reflected in the fund-basis statements as capital expenditures.b. Long-Term DebtThere were $10,500,000 of outstanding long-term notes associated with governmental-type funds as of January 1, 2020. Interest is paid monthly.December 31, 2020, notes with a face value of $6,370,000 were issued at par. In addition, principal payments totaled $1,340,000.The notes, and any retained percentage on construction contracts, are associated with the purchase of capital assets.c. Deferred InflowsDeferred inflows are comprised solely of property taxes expected to be collected more than 60 days after year-end. The balance of deferred taxes at the end of 2019 was $92,000.d. Transfers: Transfers were between governmental-type funds.e. Beginning net position for the government-wide statements totaled $20,247,121 as January 1, 2020. This amount has already been entered in the Statement of Activities.Required:Use the Excel template provided to complete the following requirements. A separate tab is provided for each requirement:a. Prepare the journal entries necessary to convert the governmental fund financial statements to the accrual basis of accounting.b. Post the journal entries to the (shaded) Adjustments column to produce a Statement of Activities. You do not have to post amounts debited or credited to "(beginning) net position." These have been reflected in item e above.c. Post the journal entries to the (shaded) Adjustments column to produce a Statement of Net Position. Calculate the appropriate amounts for the Net Position accounts, assuming there are restricted net position. Type journal entries to convert to the accrual basis in the space belowTotalCapitalProjects Governmental Government-FundAdjustments toGeneralStatement ofand post them to the financial statements on the next two tabs.FundFundswideActivitiesRevenuesdebitscreditsProperty TaxesIntergovernmental revenuesInvestment income:20,205,519$20,205,5192,269,75120,205,519Capital assetsAccumulated depreciationNet positiona.21,050,000145,8012,415,5522,415,5525,770,00015,280,000461,684161,69123,098.645Interest income461,684461,684161,69123,244,446Net increase in fair value of investmentsDepreciation expenseAccumulated depreciation161,69123,244,446434,000Total Revenues145,801434,000Expenditures / ExpensesCapital assetsCapital outlay expenditureСurrent:Public services14,032,71114,032,71114,032,711Library MaterialsDepreciationCapital OutlayDebt Service5,474,6325,474,6325,474,632Net positionNotes payableb.10,500,00010,500,000453,0337,539,4817,992,5147,992,514OFS - Proceeds of debt6,370,0001,340,000830,90422,131,2801,340,000830,90429,670,761Principal1,340,000830,90429,670,761Notes payable6,370,000InterestTotal Expenditures7,539.481Notes payableDebt service expenditure - Principal1,340,0001,340,000Excess (Deficiency) of Revenues Over Expenditure967,365 (7,393,680)(6,426,315)(6,426,315)Property tax revenue92,800c.Other finaneing sources (uses)Net position92,8006,370,0002,500,000(2,500,000)6,370,0006,370,0002,500,000Proceeds of debt6.370,000Transfers in2,500,000Deferred property taxes(2,500,000)6,370,000Transfers out(2,500,000)Property tax revenuetotal other financing sources (uses)(2,500,000) S,870,000OFS - Transfers inOFU - Transfers outd.Net Change in Fund Balance/Net PositionFund Balance Net Position, January 1Fund Balance/Net Position, December 31(56,315)15,374,321$11,076,806 $4,241,200 $ 15,318,006(1,532,635) 1,476,32012,609,441(56.315)2,764,88020,247,121$ 20,190,806 TotalAdjustmentsGeneralCapitalProjects FundGovernmental to Government- Statement ofFundFundswideNet PositionAssetsCashS 15,859,823$11,034,232 S 4,825,591 $ 15,859,823683,722131,5342,487Investments683,722683,722131,5342,487596,901Taxes Receivable - Gross131,5342,487Interest ReceivablePrepaid ItemsCapital Assets596,901596,901Accumulated DepreciationTotal Assets$12,448,876 S 4,825,591 $ 17,274,467 S$ 17,274,467Liabilities, Deferred Inflows and Fund BalancesLiabilitiesAccounts Payable877,468400,6021,202,077400,602259,782324,6091,202,077400,602259,782Accrued LiabilitiesContracts payable - Retained %Long-term Notes Payable259,7821,278,070584,3911,862,461Total Liabilities1,862,461Deferred InflowsDeferred Inflows - Property Taxes94,00094,00094,000Fund BalancesNonspendablePrepaid ItemsAssignedLibrary purchasesCapital projectsUnassigned596,901596,901585,220585,2204,241,2009,894,68515,318,0064,241,2009,894,68511,076,806Total Fund Balances4,241,200Net PositionNet investment in capital assets(259,782)15,671,788$ 15,412,006Unrestricted

Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question specifying the one you’d like answered.Answer:

The fund-basis financial statements of Cherokee Library District (a special-purpose government engaged only in governmental activities) have been completed for the year 2020 and appear in the second and third tabs of the Excel spreadsheet provided with this exercise. The following information is also available: a. Capital Assets Capital assets purchased in previous years through governmental-type funds total $21,050,000 and had accumulated depreciation of $5,770,000. Depreciation on capital assets used in governmental-type activities amounted to $434,000 for 2020. No capital assets were sold or disposed of in 2020, and all purchases are properly reflected in the fund-basis statements as capital expenditures. b. Long-Term Debt There were $10,500,000 of outstanding long-term notes associated with governmental-type funds as of January 1, 2020. Interest is paid monthly. December 31, 2020, notes with a face value of $6,370,000 were issued at par. In addition, principal payments totaled $1,340,000. The notes, and any retained percentage on construction contracts, are associated with the purchase of capital assets. c. Deferred Inflows Deferred inflows are comprised solely of property taxes expected to be collected more than 60 days after year-end. The balance of deferred taxes at the end of 2019 was $92,000. d. Transfers: Transfers were between governmental-type funds. e. Beginning net position for the government-wide statements totaled $20,247,121 as January 1, 2020. This amount has already been entered in the Statement of Activities. Required: Use the Excel template provided to complete the following requirements. A separate tab is provided for each requirement: a. Prepare the journal entries necessary to convert the governmental fund financial statements to the accrual basis of accounting.

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

9-12.

The fund-basis financial statements of Cherokee Library District (a special-purpose government engaged only in governmental activities) have been completed for the year 2020 and appear in the second and third tabs of the Excel spreadsheet provided with this exercise. The following information is also available:

a. Capital Assets

Capital assets purchased in previous years through governmental-type funds total $21,050,000 and had accumulated depreciation of $5,770,000.
Depreciation on capital assets used in governmental-type activities amounted to $434,000 for 2020.
No capital assets were sold or disposed of in 2020, and all purchases are properly reflected in the fund-basis statements as capital expenditures.

b. Long-Term Debt

There were $10,500,000 of outstanding long-term notes associated with governmental-type funds as of January 1, 2020. Interest is paid monthly.
December 31, 2020, notes with a face value of $6,370,000 were issued at par. In addition, principal payments totaled $1,340,000.
The notes, and any retained percentage on construction contracts, are associated with the purchase of capital assets.

c. Deferred Inflows

Deferred inflows are comprised solely of property taxes expected to be collected more than 60 days after year-end. The balance of deferred taxes at the end of 2019 was $92,000.

d. Transfers: Transfers were between governmental-type funds.

e. Beginning net position for the government-wide statements totaled $20,247,121 as January 1, 2020. This amount has already been entered in the Statement of Activities.

Required:

Use the Excel template provided to complete the following requirements. A separate tab is provided for each requirement:

a. Prepare the journal entries necessary to convert the governmental fund financial statements to the accrual basis of accounting.

b. Post the journal entries to the (shaded) Adjustments column to produce a Statement of Activities. You do not have to post amounts debited or credited to "(beginning) net position." These have been reflected in item e above.

c. Post the journal entries to the (shaded) Adjustments column to produce a Statement of Net Position. Calculate the appropriate amounts for the Net Position accounts, assuming there are restricted net position.

Type journal entries to convert to the accrual basis in the space below
Total
Capital
Projects Governmental Government-
Fund
Adjustments to
General
Statement of
and post them to the financial statements on the next two tabs.
Fund
Funds
wide
Activities
Revenues
debits
credits
Property Taxes
Intergovernmental revenues
Investment income:
20,205,519
$20,205,519
2,269,751
20,205,519
Capital assets
Accumulated depreciation
Net position
a.
21,050,000
145,801
2,415,552
2,415,552
5,770,000
15,280,000
461,684
161,691
23,098.645
Interest income
461,684
461,684
161,691
23,244,446
Net increase in fair value of investments
Depreciation expense
Accumulated depreciation
161,691
23,244,446
434,000
Total Revenues
145,801
434,000
Expenditures / Expenses
Capital assets
Capital outlay expenditure
Сurrent:
Public services
14,032,711
14,032,711
14,032,711
Library Materials
Depreciation
Capital Outlay
Debt Service
5,474,632
5,474,632
5,474,632
Net position
Notes payable
b.
10,500,000
10,500,000
453,033
7,539,481
7,992,514
7,992,514
OFS - Proceeds of debt
6,370,000
1,340,000
830,904
22,131,280
1,340,000
830,904
29,670,761
Principal
1,340,000
830,904
29,670,761
Notes payable
6,370,000
Interest
Total Expenditures
7,539.481
Notes payable
Debt service expenditure - Principal
1,340,000
1,340,000
Excess (Deficiency) of Revenues Over Expenditure
967,365 (7,393,680)
(6,426,315)
(6,426,315)
Property tax revenue
92,800
c.
Other finaneing sources (uses)
Net position
92,800
6,370,000
2,500,000
(2,500,000)
6,370,000
6,370,000
2,500,000
Proceeds of debt
6.370,000
Transfers in
2,500,000
Deferred property taxes
(2,500,000)
6,370,000
Transfers out
(2,500,000)
Property tax revenue
total other financing sources (uses)
(2,500,000) S,870,000
OFS - Transfers in
OFU - Transfers out
d.
Net Change in Fund Balance/Net Position
Fund Balance Net Position, January 1
Fund Balance/Net Position, December 31
(56,315)
15,374,321
$11,076,806 $4,241,200 $ 15,318,006
(1,532,635) 1,476,320
12,609,441
(56.315)
2,764,880
20,247,121
$ 20,190,806

Total
Adjustments
General
Capital
Projects Fund
Governmental to Government- Statement of
Fund
Funds
wide
Net Position
Assets
Cash
S 15,859,823
$11,034,232 S 4,825,591 $ 15,859,823
683,722
131,534
2,487
Investments
683,722
683,722
131,534
2,487
596,901
Taxes Receivable - Gross
131,534
2,487
Interest Receivable
Prepaid Items
Capital Assets
596,901
596,901
Accumulated Depreciation
Total Assets
$12,448,876 S 4,825,591 $ 17,274,467 S
$ 17,274,467
Liabilities, Deferred Inflows and Fund Balances
Liabilities
Accounts Payable
877,468
400,602
1,202,077
400,602
259,782
324,609
1,202,077
400,602
259,782
Accrued Liabilities
Contracts payable - Retained %
Long-term Notes Payable
259,782
1,278,070
584,391
1,862,461
Total Liabilities
1,862,461
Deferred Inflows
Deferred Inflows - Property Taxes
94,000
94,000
94,000
Fund Balances
Nonspendable
Prepaid Items
Assigned
Library purchases
Capital projects
Unassigned
596,901
596,901
585,220
585,220
4,241,200
9,894,685
15,318,006
4,241,200
9,894,685
11,076,806
Total Fund Balances
4,241,200
Net Position
Net investment in capital assets
(259,782)
15,671,788
$ 15,412,006
Unrestricted

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