Chapter 12, Problem 38P

a.

To determine

Prepare a statement of activities and a statement of net position for the year 2015.

Explanation of Solution

Statement of activity for W:

Statement of activities
Program revenue				Net revenue and change in net assets
Program	Expenses	Charges for services	Grants and contribution (operating)	Grants and contribution (capital)	Governmental activities	Business activities	Total
Primary government:
Governmental activities
General governmental	$149,000	$5,000		$14,000	($130,000)		($130,000)
Public safety	$90,000	$3,000			($87,000)		($87,000)
Health and sanitation	$70,000	$42,000			($28,000)		($28,000)
Interest on debt	$16,000				($16,000)		($16,000)
Total governmental activities	$325,000	$50,000		$14,000	($261,000)		($261,000)

Table: (1)

Working note:

Computation of closing amount of net assets:

General revenue:
Property taxes	$ 401,000
Franchise taxes	$   42,000
Investment	$   13,000
Total	$ 456,000
Change in net assets	$ 195,000
Net assets – beginning
Net assets – closing	$ 195,000

Table: (2)

Statement of net assets for W:

Statement of net assets
Particulars	Governmental activities	Business activities	Total
Assets
Cash & equivalents	$              62,000		$      62,000
Prepaid expenses	$                2,000		$         2,000
Investment	$           103,000		$    103,000
Receivables	$              81,000		$      81,000
Inventories	$                3,000		$         3,000
Capital assets	$           172,000		$    172,000
Total assets	$           423,000		$    423,000
			$                -
Liabilities			$                -
Salaries payable	$              19,000		$      19,000
Compensating absence		$       13,000	$      13,000
Noncurrent liabilities	$           196,000		$    196,000
Total liabilities	$           215,000	$       13,000	$    228,000
			$                -
Net assets			$                -
			$                -
Invested in net assets	$           (24,000)		$    (24,000)
Unrestricted	$           219,000		$    219,000
Total net assets	$           195,000		$    195,000

Table: (3)

b.

To determine

Prepare a statement of revenues, expenditures and other changes in fund balance and a balance sheet for the year 2015.

Explanation of Solution

Statement of revenues, expenditures and other changes in fund balance for W:

Statement of revenue, expenditure and change in fund balance
Particulars	General funds	Total government funds
Property taxes	$                 401,000	$                   401,000
Franchise taxes	$                   42,000	$                     42,000
Charges for Services	$                   50,000	$                     50,000
Investments	$                   13,000	$                     13,000
Total	$                 506,000	$                   506,000
Expenditures:
General Governmental	$                 110,000	$                   110,000
Public Safety	$                   90,000	$                     90,000
Health and Sanitation	$                   54,000	$                     54,000
Debt Service:
Principal payment on debt	$                     4,000	$                       4,000
Interest on debt	$                   16,000	$                     16,000
Capital Outlay	$                 200,000	$                   200,000
Total expenditures	$474,000	$474,000
Excess of
revenues over expenses	32,000	32,000
Other Financing Sources:
Proceeds from long-term note	200,000	200,000
other
uses and sources	200,000	200,000
Net Changes in fund balance
Fund Balances (beginning)	-	-
Fund Balances (ending)	$232,000	$232,000

Table: (4)

Balance sheet for W:

Balance sheet
Particulars	General funds ($)	Total government funds ($)
Assets:
Cash & equivalents	62,000	62,000
Prepaid expense	2,000	2,000
Investment	103,000	103,000
Receivables	81,000	81,000
Inventory	3,000	3,000
Total assets	251,000	251,000
Liabilities:
Salaries payable	19,000	19,000
Fund balance -
For encumbrances	12,000	12,000
For inventory	3,000	3,000
For prepaid expenses	2,000	2,000
For unreserved	215,000	215,000
Total fund balance	232,000	232,000
Total liabilities	251,000	251,000

Table: (5)