Lecture Chapter 14

one worksheet approach Chapter 14 advances past the format of the Government-Wide financial statements to the actual construction of them. one worksheet approach Best way to learn, is by doing an example.

REQUIRED: Prepare a conversion worksheet for Tierney County to derive the governmental activities information to be reported in the county’s government-wide statement of net assets and statement of activities for 20X5. Step 1 ENTER THE PRECLOSING TRIAL BALANCE INFORMATION FOR TIERNEY COUNTY GOVERNMENTAL FUNDS INTO THE WORKSHEET. This is done for you already on your handout.

PAGE ONE OF WORKSHEET

PAGE TWO OF WORKSHEET BALANCES AT $22,860,075 ==========

Step 2 ENTER IN THE GCA AND GLTL INFORMATION DIRECTLY BELOW THE PRE-CLOSING TRIAL BALANCE INFORMATION. SHOW A SEPARATE BALANCING FIGURE FOR THIS INFORMATION. This is also done for you already on your handout.

THIS BALANCES AT $36,100,575

Step 3 NOW ENTER INTO WORKSHEET Reclassify capital outlay expenditures as capital assets (2) are listed on the pre-closing trial balance: First page CAPITAL OUTLAY EXPENDITURES For construction………….. $8,890,000 For equipment…………….. 203,700 Entry posted on worksheet to CONVERT. Construction-in-progress…….. $8,890,000 Machinery & Equipment…….. 203,700 Construction expenditures………… $8,890,000 Equipment expenditures…………… 203,700 1 NOTE: These entries ARE NOT REALLY MADE in any journal/ledger. They are just WORKSHEET entries made to adjust governmental funds to GOVERNMENT-WIDE accounts. NOW ENTER INTO WORKSHEET

Step 3 1 Construction-in-progress…….. $8,890,000 Machinery & Equipment…….. 203,700 Construction expenditures………… $8,890,000 Equipment expenditures…………… 203,700 PAGE TWO OF WORKSHEET 1 Step 3 GCA & GLTL NOW RECORD THE CREDITS ON THE 1ST PAGE THE WORKSHEET.

Step 3 1 Construction-in-progress…….. $8,890,000 PAGE ONE OF WORKSHEET Construction-in-progress…….. $8,890,000 Machinery & Equipment…….. 203,700 Construction expenditures………… $8,890,000 Equipment expenditures…………… 203,700 1 Step 3

Eliminate GCA sale proceeds and record a gain on Step 4 Eliminate GCA sale proceeds and record a gain on the capital asset sale $175,000 is listed as a proceed from the Sale of GCA on pre-closing trial balance (PCTB) top of page 2 of worksheet. Need to also know: The capital asset sold was for equipment which cost $500,000, and had accumulated depreciation at the January 1 sale date of $400,000. Entry made for governmental accounting Cash……..$175,000 Proceeds from sale of capital equipment………$175,000 DID Entry which would have been made for government-wide (full-accrual) Cash…….$175,000 Acc/Dep. mach&ept.. 400,000 Equipment……..$500,000 Gain on sale of equipment… $ 75,000 Entry posted to worksheet to CONVERT. Acc/Dep mach & eqt . $400,000 Proceeds…. 175,000 Equipment………$500,000 Gain………………. 75,000 2 FIX SHOULD NOW POST TO WORKSHEET

Step 4 2 Acc/Dep mach & eqt . $400,000 Proceeds…. 175,000 Equipment………$500,000 Gain………………. 75,000 2 PAGE TWO OF WORKSHEET Step 4 GCA & GLTL

Step 5 Record Depreciation Depreciation expense is of course, not recorded for governmental funds. Additional information: Depreciation expense on buildings and on machinery and equipment is associated with functions as follows: General government…………. 10% Public Safety…………………. 50% Highways and Streets………. 25% Heath and sanitation………. 10% Other………………………….. 5% Additionally: The county depreciates equipment over 5 years, buildings over 20 years, and streets and roads over 30 years. Assume zero salvage values.

Step 5 Record Depreciation From PCTB: Buildings……… $4,375,000 = $218,750 depreciation expense for 20X5. 20 yrs (given) wait to post to worksheet until all depreciation is calculated. Depreciation expense on buildings and on machinery and equipment is associated with functions as follows: General government…………. 10% Public Safety…………………. 50% Highways and Streets………. 25% Heath and sanitation………. 10% Other………………………….. 5% x 218,750 = $21,875 x 218,750 = $109,375 x 218,750 = $54,687 * rounding x 218,750 = $10,938

Step 5 Record Depreciation Depreciation expense-Gen Gov…$21,875 Depreciation expense-Pub Saf…..109,375 Depreciation expense-Highways.. 54,687 Health & Sanitation……………… 21,875 Other……………………………… 10,938 Accumulated Depreciation- Building………$218,750 Step 5 Record Depreciation The county depreciates equipment over 5 years, buildings over 20 years, and streets and roads over 30 years. Assume zero salvage values. Depreciation expense-Gen Gov…$32,074 Depreciation expense-Pub Saf…..160,370 Depreciation expense-Highways.. 80,186 Health & Sanitation……………… 32,074 Other……………………………… 16,036 Accumulated Depreciation- Machinery & Equipment………$320,740 These are posted on worksheet as summations of both expenses but the accumulated depreciat. for mach & buildings are posted separately. From PCTB: Mach & Ept……… ($1,400,000 beg + $203,700 adj(1)) = $320,740 depreciation expense for 20X5. 5 years = $320,740 The $500,000 sold should be subtracted before depreciating but the authors of problem didn’t do that. Depreciation expense on buildings and on machinery and equipment is associated with functions as follows: General government…………. 10% Public Safety…………………. 50% Highways and Streets………. 25% Heath and sanitation………. 10% Other………………………….. 5% PLUS SUM $53,949 269,745 134,873 53,949 26,974 x 320,740 = $32,074 x 320,740 = $160,370 x 320,740 = $ 80,186 *rounding x 320,740 = $16,036 218,750 = $21,875 218,750 = $109,375 218,750 = $54,687 *rounding 218,750 = $10,938

Step 5 3a 3a PAGE ONE OF WORKSHEET $32,074 + $21,875 = $53,949 Depreciation expense-Gen Gov…$32,074 Depreciation expense-Pub Saf…..160,370 Depreciation expense-Highways.. 80,186 Health & Sanitation……………… 32,074 Other……………………………… 16,036 Accumulated Depreciation- Machinery & Equipment………$320,740 3a Step 5 Depreciation expense-Gen Gov…$21,875 Depreciation expense-Pub Saf…..109,375 Depreciation expense-Highways.. 54,687 Health & Sanitation……………… 21,875 Other……………………………… 10,938 Accumulated Depreciation- Building………$218,750 3a $32,074 + $21,875 = $53,949

Step 5 3a 3a PAGE ONE OF WORKSHEET $160,370 + $109,375 = $269,745 Depreciation expense-Gen Gov…$32,074 Depreciation expense-Pub Saf…..160,370 Depreciation expense-Highways.. 80,186 Health & Sanitation……………… 32,074 Other……………………………… 16,036 Accumulated Depreciation- Machinery & Equipment………$320,074 3a Step 5 Depreciation expense-Gen Gov…$21,875 Depreciation expense-Pub Saf…..109,375 Depreciation expense-Highways.. 54,687 Health & Sanitation……………… 21,875 Other……………………………… 10,938 Accumulated Depreciation- Building………$218,750 3a $160,370 + $109,375 = $269,745

Step 5 3a 3a PAGE ONE OF WORKSHEET $80,186 + $54,687 = $134,873 Depreciation expense-Gen Gov…$32,074 Depreciation expense-Pub Saf…..160,370 Depreciation expense-Highways.. 80,186 Health & Sanitation……………… 32,074 Other……………………………… 16,036 Accumulated Depreciation- Machinery & Equipment………$320,074 3a Step 5 Depreciation expense-Gen Gov…$21,875 Depreciation expense-Pub Saf…..109,375 Depreciation expense-Highways.. 54,687 Health & Sanitation……………… 21,875 Other……………………………… 10,938 Accumulated Depreciation- Building………$218,750 3a $80,186 + $54,687 = $134,873

Step 5 3a 3a PAGE ONE OF WORKSHEET $32,074 + $21,875 =$53,949 Depreciation expense-Gen Gov…$32,074 Depreciation expense-Pub Saf…..160,370 Depreciation expense-Highways.. 80,186 Health & Sanitation……………… 32,074 Other……………………………… 16,036 Accumulated Depreciation- Machinery & Equipment………$320,074 3a Step 5 Depreciation expense-Gen Gov…$21,875 Depreciation expense-Pub Saf…..109,375 Depreciation expense-Highways.. 54,687 Health & Sanitation……………… 21,875 Other……………………………… 10,938 Accumulated Depreciation- Building………$218,750 3a $32,074 + $21,875 =$53,949

Step 5 3a 3a PAGE ONE OF WORKSHEET $16,036 + $10,938 = $26,974 Depreciation expense-Gen Gov…$32,074 Depreciation expense-Pub Saf…..160,370 Depreciation expense-Highways.. 80,186 Health & Sanitation……………… 32,074 Other……………………………… 16,036 Accumulated Depreciation- Machinery & Equipment………$320,074 3a Step 5 Depreciation expense-Gen Gov…$21,875 Depreciation expense-Pub Saf…..109,375 Depreciation expense-Highways.. 54,687 Health & Sanitation……………… 21,875 Other……………………………… 10,938 Accumulated Depreciation- Building………$218,750 3a $16,036 + $10,938 = $26,974 now record the accumulated depreciations

Step 5 3a 3a PAGE TWO OF WORKSHEET GCA & GLTL Depreciation expense-Gen Gov…$21,875 Depreciation expense-Pub Saf…..109,375 Depreciation expense-Highways.. 54,687 Health & Sanitation……………… 21,875 Other……………………………… 10,938 Accumulated Depreciation- Building………$218,750 3a PAGE TWO OF WORKSHEET Depreciation expense-Gen Gov…$32,074 Depreciation expense-Pub Saf…..160,370 Depreciation expense-Highways.. 80,186 Health & Sanitation……………… 32,074 Other……………………………… 16,036 Accumulated Depreciation- Machinery & Equipment………$320,740 3a Step 5 GCA & GLTL

Step 5 continued Record Depreciation NOT quite done, still INFRASTRUCTURE ASSETS. The balance of Streets and Roads is $7,000,000 30 years left = $233,333 Entry to record depreciation of infrastructure Highways & streets depreciation expense…..$233,333 Accumulated depreciation-infrastructure streets………..$233,333

Step 5 continued 3b PAGE ONE OF WORKSHEET now post the credit Highways & streets depreciation expense…..$233,333 Accumulated depreciation-infrastructure streets………..$233,333 3b now post the credit

Step 5 3b PAGE TWO OF WORKSHEET GCA & GLTL Highways & streets depreciation expense…..$233,333 Accumulated depreciation-infrastructure streets………..$233,333 PAGE TWO OF WORKSHEET 3b Step 5 GCA & GLTL

Reclassify bond proceeds and bond issue costs Step 6 Reclassify bond proceeds and bond issue costs Bond issuance occurred at year-end. THERE ARE TWO BONDS ON THE BOOKS! ONE IS LISTED IN THE GOVERNMENTAL FUNDS INFO AS BONDS $6.3M AND PREMIUMS $42K. (Bottom page 1) THESE ARE OFS. THE OTHER ONE IS LISTED IN THE GLTL AS B/P $2.8M, PREM $70K, AND DEF BOND ISSUE COSTS 28k [This stuff is already at full –accrual and doesn’t need adjusting]. Right now in the PCTB the following accounts are present: Bonds……………………pg 2……. $6,300,000 (CR) Bond premiums………pg 2…….. 42,000 (CR) Bond issue costs………pg 1…. 35,000 (DR) Entry which would be made in govt-wide Cash………..$6,307,000 Def bond issue costs………..$ 35,000 Bonds payable…$6,300,000 Premium on b/p…$ 42,000 Entry which was made to record bond issue: should Cash……………..….$6,307,000 Bond issue costs…$ 35,000 OFS-Bonds…………………$6,300,000 OFS-Bond premiums……..$ 42,000 Entry to roll-over into GOVT-WIDE OFS-Bonds………..$6,300,000 OFS-Bond Prem… $ 42,000 Def bond issue costs………… $35,000 Bonds payable……..$6,300,000 Premium on b/p….. $ 42,000 Bond issue costs…..$35,000 did fix

Step 6 4 OFS-Bonds………..$6,300,000 OFS-Bond Prem… $ 42,000 Def bond issue costs………… $35,000 Bonds payable……..$6,300,000 Premium on b/p….. $ 42,000 Bond issue costs…..$35,000 4 BOTTOM OF PAGE ONE OF WORKSHEET Step 6 GCA & GLTL

Step 6 4 OFS-Bonds………..$6,300,000 OFS-Bond Prem… $ 42,000 Def bond issue costs………… $35,000 Bonds payable……..$6,300,000 Premium on b/p….. $ 42,000 Bond issue costs…..$35,000 PAGE TWO OF WORKSHEET 4 Step 6 GCA & GLTL now post the last credit

Step 6 continued 4 PAGE ONE OF WORKSHEET OFS-Bonds………..$6,300,000 OFS-Bond Prem… $ 42,000 Def bond issue costs………… $35,000 Bonds payable……..$6,300,000 Premium on b/p….. $ 42,000 Bond issue costs…..$35,000 4 Step 6 continued

Eliminate GLTL retirement expenditures and reduce liability Step 7 Eliminate GLTL retirement expenditures and reduce liability Right now the PCTB contains the following: Bond Principal Retirement $700,000 (DR). Entry that was made Entry that would be made in full accrual. govt-w Bond Principal Retirement expenditure….$700,000 Cash……………………………………$700,000 Bonds payable….$700,000 Cash…………$700,000 Entry to ROLLOVER Bonds payable……………….…..$ 700,000 Bond Principal Retirement Expenditure…………$700,000

Step 7 5 PAGE TWO OF WORKSHEET GCA & GLTL now post the credit Bonds payable……………….…..$ 700,000 Bond Principal Retirement Expenditure…………$700,000 Step 7 5 GCA & GLTL now post the credit

Step 7 5 PAGE ONE OF WORKSHEET Bonds payable……………….…..$ 700,000 Bond Principal Retirement Expenditure…………$700,000 5

Record bond premium amortization Step 8 Record bond premium amortization The remaining term of the bonds payable with which the premium ($70,000) and bond issue costs ($28,000) are associated is 10 years. Use SL amortization. THIS IS FOR THE BOND THAT IS ALREADY ESTABLISHED AS A BOND IN THE GLTL Entry which was made to amortize premium in govt’l funds NONE Entry to FIX and rollover to govt-wide $70,000/10 = $7,000 amortization Premium on b/p……..$ 7,000 Interest on bonds………$7,000 * Bond issue costs amortized in step 9

Step 8 Premium on b/p……..$ 7,000 Interest on bonds………$7,000 (reduces the interest expense) PAGE TWO OF WORKSHEET 6 Step 8 GCA & GLTL now post the credit

Step 8 Premium on b/p……..$ 7,000 Interest on bonds………$7,000 PAGE ONE OF WORKSHEET Premium on b/p……..$ 7,000 Interest on bonds………$7,000 (reduces the interest expense) Step 8 6

Record bond issue cost amortization Step 9 Record bond issue cost amortization The remaining term of the bonds payable with which the premium ($70,000) and bond issue costs ($28,000) are associated is 10 years. Use SL amortization. $28,000 / 10 = $2,800 amortization. Interest on bonds……. $2,800 Deferred bond issue costs……..$2,800

Step 9 Interest on bonds……. $2,800 Deferred bond issue costs……..$2,800 PAGE ONE OF WORKSHEET Interest on bonds……. $2,800 Deferred bond issue costs……..$2,800 Step 9 7

Step 9 Interest on bonds……. $2,800 Deferred bond issue costs……..$2,800 7 PAGE TWO OF WORKSHEET Step 9 GCA & GLTL

Step 10 Record accrued interest and adjust beginning net assets and interest expense. The accrued interest associated with bonds at 12/31/X5 was $ 99,000. The January 1, 20X5 balance was $87,500. $87,500 BOY vs $99,000 EOY = $11,500 increase in accrued interest payable. This increase should have resulted in this entry for GOVT-WIDE Interest expense……..$11,500 Accrued interest on bonds (payable)……. $11,500 To record this entry now in adjustments of worksheet Interest on bonds…….. $11,500 Accrued interest on bonds……$11,500 We also need to pick up the beginning balance of accrued interest because its not currently present in the governmental accounts. Net Assets (to reflect past interest expenses)….. $87,500 Accrued interest payable on bonds……………..$87,500

Step 10 Interest on bonds…….. $11,500 PAGE ONE OF WORKSHEET Interest on bonds…….. $11,500 Accrued interest on bonds……$11,500 Step 10 8b Net Assets (to reflect past interest expenses)….. $87,500 Accrued interest payable on bonds……………..$87,500 8a now record rest.

Step 10 Interest on bonds…….. $11,500 Accrued interest on bonds……$11,500 PAGE TWO OF WORKSHEET 8b Step 10 Net Assets (to reflect past interest expenses)….. $87,500 Accrued interest payable on bonds……………..$87,500 8a GCA & GLTL

Step 11 Adjust claim/adjustments expenses for decreases in long-term liability for C&J. The balance of the long-term claims and judgments obligation at 12/31/20X5 was $200,000. All claims and judgments of the county are related to health and sanitation. The PCTB shows the BOY balance is $490,000 $490,000 - $200,000 = $290,000 decrease. Entry to make to record reduction Liability for C&J….. $290,000 Health & Sanitation expenditures…..$290,000 Entry that was made. Health and Sanitation expenditures…. $290,000 Cash…………………………………….$290,000 know this because the long-term liability for C&J came down $290K and it was all for health/sanitation. implies that $290K was treated as an expenditure while it should have been treated as reducing a payable as cash was paid to reduce it. Entry that would have been made in Govt-Wide Liability for C&J………… $290,000 Cash……………………….$290,000

Step 11 Liability for C&J….. $290,000 PAGE TWO OF WORKSHEET Liability for C&J….. $290,000 Health & Sanitation expenditures…..$290,000 Step 11 9 GCA & GLTL now post credit

Step 11 Liability for C&A….. $290,000 PAGE ONE OF WORKSHEET Liability for C&A….. $290,000 Health & Sanitation expenditures…..$290,000 Step 11 9

Step 12 Adjust compensated absences expenses for increase in long-term liability for compensated absences The balance of the long-term liability for compensated absences at 12/31/X5, was $425,000. Compensated absence liabilities are generated equally by the general government, public safety, streets and roads, and health/sanitation functions. Beg. Bal is $350,000 vs $425,000 = $75,000 increase. Implies that $75,000 needs to be charged as an expenditure and the payable increase needs to be recorded. Entry to record Govt-Wide $75,000 / 4 = $18,750 CA Expenditure-Gen Gov…. $18,750 CA Expenditure-Pub Safety.. 18,750 CA Expenditure-Streets/Roads..18,750 CA Expenditure- Health/San…. 18,750 CA liability-longterm…………….$75,000

Step 12 PAGE ONE OF WORKSHEET CA Expenditure-Gen Gov…. $18,750 CA Expenditure-Pub Safety.. 18,750 CA Expenditure-Streets/Roads..18,750 CA Expenditure- Health/San…. 18,750 CA liability-longterm…………….$75,000 10 Step 12 now post credit

Step 12 CA Expenditure-Gen Gov…. $18,750 CA Expenditure-Pub Safety.. 18,750 CA Expenditure-Streets/Roads..18,750 CA Expenditure- Health/San…. 18,750 CA liability-longterm…………….$75,000 10 PAGE TWO OF WORKSHEET Step 12 GCA & GLTL

Eliminate deferred tax revenues. Step 13 Eliminate deferred tax revenues. The January 1, 20X5 balance of Deferred Tax Revenues was $84,000. First, take the beginning balance of deferred tax revenue, and give it to net assets because it should have been recognized as revenue in 20X4. Deferred Revenues………… $84,000 Net Assets…………………..$84,000 Deferred Revenue has an ending balance of $107,800 which means that it has grown during 20X5 in the amount of $107,800 - $84,000 = $23,800 Entry to get rid of $23,800 of deferred revenue that increased during the year because it would be recognized as revenue in 20X5 (not deferred). Deferred Revenues……….. $23,800 Revenues (Taxes)…………..$23,800

Step 13 PAGE ONE OF WORKSHEET 11 Deferred Revenues………… $84,000 Net Assets…………………..$84,000 11 Deferred Revenues……….. $23,800 Revenues (Taxes)…………..$23,800 11 The deferred revenues sum to $107,800 now post the credit to net assets

Step 13 11 Deferred Revenues………… $84,000 Net Assets…………………..$84,000 PAGE TWO OF WORKSHEET Step 13 GCA & GLTL

Step 14 Eliminate interfund payables and receivables between governmental funds. Just go through the PCTB and eliminate it. There’s only one. Due to Special Revenue Fund…….. $3,500 Due from General fund…...................….$3,500

Step 14 PAGE ONE OF WORKSHEET 12 Due to Special Revenue Fund…….. $3,500 Due from General fund…...................….$3,500 12 Step 14

Eliminate transfers between governmental Step 15 Eliminate transfers between governmental funds. Again, go through the PCTB and find/eliminate them. Transfers from GF……………..….. $616,000 Transfers from Special Rev Funds $70,000 Transfers to CPF………………….. $56,000 Transfers to DSF…………………. $560,000 Transfers to GF…………………….$ 70,000

Step 15 13 Transfers from GF……………..….. $616,000 Transfers from Special Rev Fund.… $70,000 Transfers to CPF………………….. $56,000 Transfers to DSF…………………. $560,000 Transfers to GF…………………….$ 70,000 13 PAGE TWO OF WORKSHEET Step 15 GCA & GLTL

Reclassify beginning fund balance as net Step 16 Reclassify beginning fund balance as net assets. Fund Balance…… $695,049 Net assets……….$695,049 not allowed to call it “fund balance” in GOVT-WIDE

Step 16 Fund Balance…… $695,049 Net assets……….$695,049 PAGE ONE OF WORKSHEET Step 16 Fund Balance…… $695,049 Net assets……….$695,049 14 now post credit to NA

Step 16 Fund Balance…… $695,049 Net assets……….$695,049 PAGE TWO OF WORKSHEET Step 16 Fund Balance…… $695,049 Net assets……….$695,049 14 GCA & GLTL

Worksheet is COMPLETE

Statement of Activities For the Year Ended December 31, 20X5 Using the information derived from the worksheet present the government activities in the government-wide financial statements for Tierney County for 20X5. Tierney County Statement of Activities For the Year Ended December 31, 20X5 Program Revenues Net (Expenses) Revenues and Changes in Net Assets Primary Government Charges Operating Governmental Business-Type Total for Grants and Capital Activities Activities Functions: Expenses Services Contributions Grnts Primary gov. Gov Activities: Gen Government $347,099 ($347,099) worksheet GW Lunch Exp DR. Public Safety 1,705,995 444,500 100,000 (1,161,495) #7 notes that $100K of $420 worksheet GW Lunch CR is for public safety. $311,500 (License & Permits) + $133,000 (Fines & Forfeitures) = $444,500. (We’re told they are public safety in piece of info #4). worksheet GW Lunch CR

Statement of Activities For the Year Ended December 31, 20X5 Using the information derived from the worksheet you prepared for P14-5, present the government activities in the government-wide financial statements for Tierney County for 20X5. Tierney County Statement of Activities For the Year Ended December 31, 20X5 Program Revenues Net (Expenses) Revenues and Changes in Net Assets Primary Government Charges Operating Governmental Business-Type Total for Grants and Capital Activities Activities Functions: Expenses Services Contributions Grnts Primary gov. Gov Activities: Gen Government $347,099 ($347,099) Public Safety 1,705,995 444,500 100,000 (1,161,495) Highways & Streets 7,231,000 5,982,344 1,248,656 worksht GW Lunch DR Health & Sanitation (54,901) actually is negative expense ws GW (DR) 320,000 374,901 Told its highways & streets in piece of info #7 WS GW Lunch CR rest of $420,000 grant; told in #7 its highways and streets ws GW Lunch CR

Statement of Activities For the Year Ended December 31, 20X5 Using the information derived from the worksheet you prepared for P14-5, present the government activities in the government-wide financial statements for Tierney County for 20X5. Tierney County Statement of Activities For the Year Ended December 31, 20X5 Program Revenues Net (Expenses) Revenues and Changes in Net Assets Primary Government Charges Operating Governmental Business-Type Total for Grants and Capital Activities Activities Functions: Expenses Services Contributions Grnts Primary gov. Gov Activities: Gen Government $347,099 ($347,099) Public Safety 1,705,995 444,500 100,000 (1,161,495) Highways & Streets 7,231,000 5,982,344 1,248,656 Health & Sanitation (54,901) 320,000 374,901 Other 92,074 (92,074) ws GW Lunch DR Interest 416,275 (416,275) $363,775 (interest on bonds) + $52,500 (fiscal agent fees) ws GW Lunch DR

Statement of Activities For the Year Ended December 31, 20X5 Using the information derived from the worksheet you prepared for P14-5, present the government activities in the government-wide financial statements for Tierney County for 20X5. Tierney County Statement of Activities For the Year Ended December 31, 20X5 Program Revenues Net (Expenses) Revenues and Changes in Net Assets Primary Government Charges Operating Governmental Business-Type Total for Grants and Capital Activities Activities Functions: Expenses Services Contributions Grnts Primary gov. Gov Activities: Gen Government $347,099 ($347,099) Public Safety 1,705,995 444,500 100,000 (1,161,495) Highways & Streets 7,231,000 5,982,344 1,248,656 Health & Sanitation (54,901) 320,000 374,901 Other 92,074 (92,074) Interest 416,275 (416,275) Total government activities…… $3,755,198 $444,500 $420,000 $7,231,000 $4,340,302

Statement of Activities For the Year Ended December 31, 20X5 Using the information derived from the worksheet you prepared for P14-5, present the government activities in the government-wide financial statements for Tierney County for 20X5. Tierney County Statement of Activities For the Year Ended December 31, 20X5 Program Revenues Net (Expenses) Revenues and Changes in Net Assets Primary Government Charges Operating Governmental Business-Type Total for Grants and Capital Activities Activities Functions: Expenses Services Contributions Grnts Total government activities…… $3,755,198 $444,500 $420,000 $7,231,000 $4,340,302 General Revenues: Property taxes, levied for general purposes… $3,418,800 GW lunch CR Unrestricted grant rev 367,500 GW lunch CR Investment income 600,000 GW lunch CR Other…………… 7,000 GW lunch CR Gain on sale of capital assets.. 75,000 GW lunch CR toward bottom WS Transfers from enterprise 63,000 GW lunch CR ------------------------------------------------------- Total general revenues and transfers………… $4,531,300 Change in net assets.. 8,871,602 (4,340,302 + 4,531,300) Net Assets-beg……. 2,767,049 (given) Net assets-end…… $11,638,651

Statement of Net Assets Tierney County Statement of Net Assets December 31, 20X5 ASSETS: Cash………………………………. $1,348,200 Investments…………………….. 7,355,600 Taxes Receivable (net)………… 150,500 (189K-38,500) Interest/penalities Receivable…(net) 4,774 (5,250 – 476) Accounts Receivable…(net)… 43,750 (45,500 – 1,750) Accrued Interest Receivable… 191,800 Internal Balances…(to enterprise fund) (11,550) shown with the assets Inventory of Materials & Supplies.. 16,450 Deferred Bond Issue Costs…. 60,200 Capital Assets, net: Land………………………………. 437,500 Buildings (net) …………………. 1,426,250 (4,375,000 – 2,948,750) Machinery & Equipment (net) .. 657,960 (1,103,700 – 445,740) Infrastructure (Streets & Roads)net.. 2,566,667(7,000,000 – 4,433,333) CIP………………………………… 8,890,000 ---------------- 13,978,377 Total Assets………………… $23,138,101

Statement of Net Assets $1,050 interest/p current debt + 99,000 from bond interest adjustments (bttm worksheet) Tierney County Statement of Net Assets December 31, 20X5 LIABILITIES: Vouchers payable……….. $1,016,400 Accrued sal/wages payable 17,500 Contracts/p- Retained % 350,000 Interest/p (on current debt) 100,050 Def Operat Grnt Rev…… 360,500 Def Cap Grnt Rev…. 525,000 Noncapital Liabilities: B/P & prem………………. 8,505,000 C&J payable…………….. 200,000 Compen. Absence p…. 425,000 Due in more than one year… 9,130,000 Total liabilities………… $11,499,450 ASSETS: Cash………………………………. $1,348,200 Investments…………………….. 7,355,600 Taxes Receivable (net)………… 150,500 Interest/penalities Receivable…(net) 4,774 Accounts Receivable…(net)… 43,750 Accrued Interest Receivable… 191,800 Internal Balances…(to enterprise fund) (11,550) Inventory of Materials & Supplies.. 16,450 Deferred Bond Issue Costs…. 60,200 Capital Assets, net: Land………………………………. 437,500 Buildings (net) …………………. 1,426,250 Machinery & Equipment (net) .. 657,960 Infrastructure (Streets & Roads)net.. CIP………………………………… 8,890,000 ---------------- 13,978,377 Total Assets………………… $23,138,101

1. Invested in Capital Assets, Net of Related Debt The NET ASSETS are presented in (3) classifications: 1. Invested in Capital Assets, Net of Related Debt Capital Assets net of accumulated depreciation........... $13,978,377 Capital Assets, net: Land………………………………. 437,500 Buildings (net) …………………. 1,426,250 Machinery & Equipment (net) .. 657,960 Infrastructure (Streets & Roads)net.. 2,566,667 CIP………………………………… 8,890,000 -------------- $13,978,377

$6,842,577 1. Invested in Capital Assets, Net of Related Debt The NET ASSETS are presented in (3) classifications: 1. Invested in Capital Assets, Net of Related Debt Capital Assets net of accumulated depreciation........... $13,978,377 - Bonds payable (less portion equal to unspent proceeds) (6,846,000) $8,505,000 B/P (including premium) 1,659,000 (Piece of info #1: Unexpended bond proceeds at December 31, 20X5 ) --------------- $6,846,000 + Bond issue costs........................................................ 60,200 (These are added because they are an asset and related to bonds which relate to capital assets). Contracts payable....................................................... (350,000) (contracts would be related to capital assets-assume) $6,842,577

$201,000 2. Restricted Net Assets (after conversions and eliminations) Piece of info #2 tells us: Assets include cash and investments restricted for: Debt service (from which interest is payable)..... $300,000 Special Programs.............................................. $1,600,000 Debt Service Fund restricted assets................. $300,000 Debt Service Fund liabilities-............................ (99,000) (this is the accrued interest on non-capital bonds) $201,000 The only debt discussed as being serviced from the DSF is for the bonds. Thus only the bond interest is subtracted here. This is not the end because the special programs are also restricted

2. Restricted Net Assets (after conversions and eliminations) Piece of info #2 tells us: Assets include cash and investments restricted for: Debt service (from which interest is payable)..... $300,000 Special Programs.............................................. $1,600,000 Special Program restricted assets................. $1,600,000 - Deferred operating grant revenue.............. (360,500) $1,239,500 The operating grant would be used to run something like a special program.

3. Unrestricted net assets (after conversions and eliminations). General fund unrestricted NA.................. $5,540,524 Cash...... $1,348,200 + Investments 7,355,600 Restricted cash and investments given 1,900,000 (piece of info #2; page 556) Unexpended proceeds 1,659,000 + Taxes/Rec 150,500 (189,000 – 38,500) + Int/Pen Rec 4,774 (5,250 – 476) + A/R...... 43,750 Accrued Int Rec........ 191,800 Internal Bal (11,550) Material & Sup 16,450 ----------------- 5,540,524

3. Unrestricted net assets (after conversions and eliminations). General fund unrestricted NA.................. $ 5,540,524 - General Fund liabilities........................ $1,559,950 Vouchers Payable 1,016,400 Salaries/wages p...... 17,500 Interest payable (bal) 1,050 Def Capital Grant rev... 525,000 *this is where authors placed this -------------------- $1,559,950

3. Unrestricted net assets (after conversions and eliminations). General fund unrestricted NA.................. $ 5,540,524 - General Fund liabilities........................ $1,559,950 -Noncapital asset related C&J payable.. 200,000 -Noncapital asset related CA payable..... 425,000 $3,355,574

3. Unrestricted net assets (after conversions and eliminations). This can also be PLUGGED since we already know 2/3 of the components and the total net assets of $11,638,651 NET ASSETS: Invested in capital assets net of related debt.... $6,842,577 Restricted for: Debt service......... $201,000 Special Programs.1,239,500 Unrestricted: Total Net Assets... $11,638,651 $3,355,574