Question

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Assume that the City of Coyote has already produced its financial statements for December 31, 2017 and the year then ended The city's general fund was only for education and parks. Its capital projects funds worked with each of these functions at times during the current year. The city also had established an enterprise fund to account for its art museum The government-wide financial statements indicated the following figures: • Education reported net expenses of $636,000 • Parks reported net expenses of $150,000. . Art museum reported net revenues of $64,500. . General government revenues for the year were $873,500 with an overall increase in the city's net position of $152.000 The fund financial statements indicated the following for the entire year: • The general fund reported a $43.250 increase in its fund balance. • The capital projects fund reported a $51,750 increase in its fund balance. • The enterprise fund reported a $79,250 increase in its net position. The CPA firm of Abernethy and Chapman has been asked to review several transactions that occurred during 2017 and indicate how to correct any erroneous reporting and the impact of each error. View each of the following situations as independent During 2017, the City of Coyote contracted to build a bus stop for schoolchildren costing $13,500 as a special assessments project for which it collected $13,500 from affected citizens. The government had no obligation in connection with this project. Both a $13,500 revenue and a $13,500 expenditure were recorded in the capital projects fund. In preparing government.wide financial statements, an asset and a general revenue were recorded for $13,500. a. In the general information above, the capital projects fund reported a $51750 increase in its fund balance for this year. What was the correct change in the capital projects fund's balance during 2017? b. In the general information, a $152.000 overall increase in the city's net position was found on the government wide financial statements. What was the correct overall change in the city's net position on the government wide financial statements?

Answer 1

Answer Page: No 0 . According to the information provided the capital projects fond oreported an increase in its fond balance for the year of $51450. . Due to the government had no obligation, these cash flows should actually have all been reported in the agency fund, $13,500 revenue and related expenditūre were boli recorded in that fund foo this busstop construction. The audihing from hoill priemove both the crevenue & cxpenditünc from Capital projects fond because they are have same amount but an opposita cobeck on (wrent resources, this removal leaves the overall increase in tunel balance unaffected at $ 51,850 MCorrect change. incarcase = $51450 6. The overall change in het assets of the city reported on the government - wide financial statements was $ 158000 inevase

Page No ③ $13,500 revenue was ore posted with in government wide statements. The devenue should have been preposted as a liabi | -lity to the contractor is an Agency fund because the city had no obligations . Removing this revenue from governmental activities vreduces the net assct in corcase for the city from $4150000 => 152000 – 13,500 = $ 138500 * Correct change focorease = $138500