Chapter 08 - Government-Wide Statements, Capital Assets, Long-Term Debt

Essentials of Accounting for

Governmental and Not-for-Profit
Organizations 11th Edition Copley
Full download link at:

Test Bank: https://testbankpack.com/p/test-bank-for-

essentials-of-accounting-for-governmental-and-not-for-profit-
organizations-11th-edition-by-copley-isbn-0078025451-
9780078025457/

Solution Manual: https://testbankpack.com/p/solution-

manual-for-essentials-of-accounting-for-governmental-and-
not-for-profit-organizations-11th-edition-by-copley-isbn-
0078025451-9780078025457/
CHAPTER 8 Government-Wide Statements, Capital Assets, Long-Term Debt

8-1. THE SOLUTION TO THIS AND THE FIRST EXERCISE OF CHAPTERS 1 THROUGH 8 WILL DIFFER
FROM STUDENT TO STUDENT ASSUMING EACH HAS A DIFFERENT CAFR.

8-2. THE MOST COMMON NONEXCHANGE TRANSACTION THAT RESULTS IN A DIFFERENCE

BETWEEN ACCRUAL AND MODIFIED ACCRUAL ACCOUNTING IS PROPERTY TAX REVENUE.
UNDER MODIFIED ACCRUAL, PROPERTY TAXES EXPECTED TO BE COLLECTED MORE THAN 60
DAYS AFTER YEAR END ARE DEFERRED UNDER MODIFIED ACCRUAL ACCOUNTING BUT
WOULD NOT BE DEFERRED IN THE GOVERNMENT-WIDE STATEMENTS USING ACCRUAL
ACCOUNTING. ANOTHER COMMON REVENUE THAT RESULTS IN DIFFERENCES IS INCOME
TAXES. IT IS COMMON THAT INCOME TAXES MAY NOT BE COLLECTED IN TIME TO MEET THE
“AVAILABLE” CRITERIA USED FOR MODIFIED ACCRUAL RECOGNITION.

IN CONTRAST, MANADATED AND VOLUNTARY NONEXCHANGE TRANSACTIONS (GRANTS)

TYPICALLY RESULT IN REVENUE RECOGNITION IN THE SAME PERIODS UNDER THE ACCRUAL
AND MODIFIED ACCRUAL BASES.

8-3. INTERNAL SERVICE FUNDS MOST COMMONLY PROVIDE GOODS AND SERVICES TO
GOVERNMENT DEPARTMENTS CLASSIFIED WITHIN GOVERNMENTAL ACTIVITIES . THESE
DEPARTMENTS ARE TYPICALLY REPORTED IN THE GENERAL FUND. FOR THIS REASON, THE
ASSETS, LIABILTIES AND NET ASSETS USED TO ACCOMPLISH GOVERMENTAL ACTIVITIES,
INCLUDING THOSE CLASSIFIED AS INTERNAL SERVICE FUND ACTIVITIES, ARE REPORTED AS
GOVERNMENTAL ACTIVITIES IN THE STATEMENT OF NET ASSETS. HOWEVER, IF AN
INTERNAL SERVICE FUND PREDOMINANTLY PROVIDED GOODS AND SERVICES TO ENTERPRISE

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Chapter 08 - Government-Wide Statements, Capital Assets, Long-Term Debt
FUNDS, IT SHOULD BE REPORTED IN THE BUSINESS ACTIVITIES COLUMN OF THE STATEMENT
OF NET ASSETS.

8-4.

A. INFRASTRUCTURE, ACCORDING TO GASB STATEMENT 34, REPRESENTS “LONG-LIVED

CAPITAL ASSETS THAT NORMALLY ARE STATIONARY IN NATURE AND NORMALLY CAN BE
PRESERVED FOR A SIGNIFICANTLY GREATER NUMBER OF YEARS THAN MOST CAPITAL
ASSETS. EXAMPLES OF INFRASTRUCTURE ASSETS INCLUDE ROADS, BRIDGES, TUNNELS,
DRAINAGE SYSTEMS, WATER AND SEWER SYSTEMS, DAMS, AND LIGHTING SYSTEMS.”

B. A GOVERNMENT MAY RECORD INFRASTRUCTURE AND DEPRECIATE IT AS ANY OTHER FIXED

ASSETS OR MAY USE THE “MODIFIED” METHOD. THE DIFFERENCES ARE THAT UNDER THE
“MODIFIED METHOD” GOVERNMENTS EXPENSE AMOUNTS THAT ARE EXPENDED TO EXTEND
THE LIFE OF THE INFRASTRUCTURE (BUT NOT IMPROVE IT) AND THEN ARE NOT REQUIRED TO
RECORD DEPRECIATON ON THAT INFRASTRUCTURE.

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Chapter 08 - Government-Wide Statements, Capital Assets, Long-Term Debt
8-4 (CONTINUED)
C. TO USE THE MODIFIED APPROACH, TWO CONDITIONS MUST EXIST.
a. FIRST, THE GOVERNMENT MUST HAVE AN ASSET MANAGEMENT SYSTEM THAT (1)
KEEPS AN UP-TO-DATE INVENTORY OF ELIGIBLE INFRASTRUCTURE ASSETS, (2)
PERFORMS CONDITION ASSESSMENTS OF THOSE ELIGIBLE INFRASTRUCTURE ASSETS
AT LEAST EVERY THREE YEARS, USING A CONSISTENT MEASUREMENT SCALE, AND
(3) ESTIMATES EACH YEAR THE ANNUAL AMOUNT TO MAINTAIN AND PRESERVE
THOSE ASSETS AT THE CONDITION LEVEL ESTABLISHED AND DISCLOSED BY THE
GOVERNMENT.
b. SECOND, THE GOVERNMENT MUST DOCUMENT THAT THE ELIGIBLE
INFRASTRUCTURE ASSETS ARE BEING MAINTAINED AT A LEVEL AT OR ABOVE THE
CONDITION LEVEL ESTABLISHED AND DISCLOSED BY THE GOVERNMENT.

D. TWO REQUIRED SUPPLEMENTARY INFORMATION SCHEDULES MUST BE PREPARED, WHEN

USING THE MODIFIED APPROACH. ONE IS A SCHEDULE THAT DISCLOSES THE ASSESSED
CONDITION OF ELIGIBLE INFRASTRUCTURE ASSETS. THE SECOND REPORTS THAT ESTIMATED
ANNUAL AMOUNT TO MAINTAIN AND PRESERVE ELIGIBLE INFRASTRUCTURE ASSETS
COMPARED WITH THE AMOUNT ACTUALLY EXPENDED FOR EACH OF THE PRECEDING FIVE
FISCAL PERIODS.

8-5.
1. GOVERNMENTAL FUND STATEMENTS ARE TO BE PREPARED USING THE CURRENT
FINANCIAL RESOURCES MASUREMENT FOCUS AND MODIFIED ACCRUAL BASIS OF
ACCOUNTING.
PROPRIETARY FUND, FIDUCIARY FUND, AND GOVERNMENT-WIDE STATEMENTS ARE TO
BE PREPARED USING THE ECONOMIC RESOURCE MEASUREMENT FOCUS AND ACCRUAL BASIS
OF ACCOUNTING.

2. A . DISCRETELY PRESENTED COMPONENT UNITS ARE INCLUDED IN THE GOVERNMENT-WIDE

BUT NOT THE FUND FINANCIAL STATEMENTS.

B. FIDUCIARY FUNDS ARE INCLUDED IN THE FUND FINANCIAL STATEMENTS; STATEMENTS

INCLUDE THE STATEMENT OF FIDUCIARY NET ASSETS AND THE STATEMENT OF CHANGES
IN FIDUCIARY NET ASSETS. FIDUCIARY FUNDS ARE NOT INCLUDED IN THE GOVERNMENT-
WIDE FINANCIAL STATEMENTS.

C. INTERNAL SERVICE FUNDS ARE REPORTED IN THE PROPRIETARY FUNDS STATEMENT OF NET
ASSETS AND STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS.
INTERNAL SERVICE FUNDS, HOWEVER, ARE USUALLY PRESENTED IN THE GOVERNMENT-
WIDE STATEMENTS AS GOVERNMENTAL, NOT BUSINESS-TYPE ACTIVITIES.

3. A. THE CATEGORY, INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT, INCLUDES ALL
CAPITAL ASSETS, LESS DEPRECIATION LESS DEBT ASSOCIATED WITH THE ACQUISITION OF
CAPITAL ASSETS.

B. RESTRICTED NET ASSETS INCLUDE NET ASSETS (A) EXTERNALLY IMPOSED BY CREDITORS
(SUCH AS THROUGH DEBT COVENANTS), AND (B) IMPOSED BY LAW THROUGH
CONSTITUTIONAL PROVISIONS OR LEGISLATION.

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Chapter 08 - Government-Wide Statements, Capital Assets, Long-Term Debt
8-5 (CONTINUED).
C. UNRESTRICTED NET ASSETS REPRESENT THOSE NET RESOURCES NOT REPRESENTED IN
EITHER OF THE OTHER TWO CATEGORIES. THAT NUMBER IS OBTAINED BY SUBTRACTING
FROM TOTAL NET ASSETS THE NET CAPITAL ASSETS, NET OF RELATED DEBT, AND THE
RESTRICTED NET ASSETS.

8-6. SOME OF THE ITEMS THAT WILL NEED ADJUSTING, WHEN MOVING FROM FUND FINANCIAL
STATEMENTS TO GOVERNMENT-WIDE FINANCIAL STATEMENTS, INCLUDE:
A. CAPITAL ASSET RELATED ENTRIES:
1) RECORDING THE BEGINNING BALANCE OF GENERAL FIXED ASSETS AND RELATED
ACCUMULATED DEPRECIATION ACCOUNTS.

2) ELIMINATING CONSTRUCTION EXPENDITURES SHOWN IN GOVERNMENTAL FUNDS

AND RECORDING THOSE AS CAPITAL ASSETS.

3) RECORDING DEPRECIATION EXPENSES FOR GENERAL FIXED ASSETS.

4) ADJUST PROCEEDS FROM SALE OF FIXED ASSETS TO GAINS FROM SALE OF FIXED
ASSETS AND RECORD THE DISPOSAL OF THE ASSET.

B. LONG-TERM DEBT RELATED ENTRIES:

1) RECORD THE BEGINNING BALANCES OF GENERAL LONG-TERM DEBT.

2) ELIMINATING PROCEEDS OF BONDS SOLD AND RECORDING THE LIABILITIES

INCURRED.

3) ELIMINATING EXPENDITURES FOR BOND PRINCIPAL AND REDUCING THE

ASSOCIATED LIABILITY.

4) MAKING ADJUSTMENTS FOR INTEREST EXPENSE ACCRUALS, INCLUDING

AMORTIZATION OF BOND DISCOUNTS AND PREMIUMS.

C. MAKING ADJUSTMENTS FOR REVENUE ACCRUALS, TO MEET THE PRIVISIONS OF GASB

STATEMENT 33.

D. MAKING ADJUSTMENTS FOR EXPENSE ACCRUALS; FOR EXAMPLE, COMPENSATED

ABSENCES.

E. INTERNAL SERVICE FUND ENTRIES

1) BRING IN BALANCES OF INTERNAL SERVICE FUND STATEMENT OF NET ASSET
ACCOUNTS.

2) ADD TRANSACTIONS OF INTERNAL SERVICE FUNDS THAT ARE WITH EXTERNAL

PARTIES.

3) REDUCE GOVERNMENTAL FUND EXPENSES BY THE NET OPERATING PROFIT OF

INTERNAL SERVICE FUNDS. GOVERNMENTAL FUND EXPENSES ARE INCREASED BY
ANY OPERATING LOSSES IN THE INTERNAL SERVICE FUNDS.

F. ELIMINATE ANY TRANSFERS AND OTHER INTERFUND BALANCES THAT ARE WITHIN
GOVERNMENTAL ACTIVITIES.

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Chapter 08 - Government-Wide Statements, Capital Assets, Long-Term Debt
8-7.
CITY OF SOUTHERN SPRINGS
STATEMENT OF NET ASSETS
APRIL 30, 2014

GOVERNMENTAL BUSINESS-TYPE
ACTIVITIES ACTIVITIES TOTAL
ASSETS:
CASH AND CASH EQUIVALENTS $1,880,000 $ 850,000 $2,730,000
RECEIVABLES 450,000 1,330,000 1,780,000
INVENTORIES 520,000 520,000
CAPITAL ASSETS, NET 12,500,000 7,050,000 19,550,000
TOTAL ASSETS 14,830,000 9,750,000 24,580,000

LIABILITIES:
ACCOUNTS PAYABLE 650,000 559,000 1,209,000
COMPENSATED ABSENCES PAYABLE 359,000 359,000
BONDS PAYABLE 8,000,000 3,210,000 11,210,000
TOTAL LIABILITIES 9,009,000 3,769,000 12,778,000

NET ASSETS:
INVESTED IN CAPITAL ASSETS, NET
OF RELATED DEBT 4,500,000 3,840,000 8,340,000
RESTRICTED FOR DEBT SERVICE 554,000 190,000 744,000
UNRESTRICTED 767,000 1,951,000 2,718,000
TOTAL NET ASSETS $5,821,000 $ 5,981,000 $11,802,000

Invested in
Governmental Activities Capital Assets,
Net of Debt Restricted Unrestricted Total
Invested in Capital Assets, Net of Debt:
Capital Assets (net) $ 12,500,000 $ 12,500,000
Less General Obligation Bonds (8,000,000) (8,000,000)
Restricted Net Assets: 554,000 554,000
Unrestricted (plug) 767,000 767,000

Total Net Assets $ 4,500,000 554,000 767,000 5,821,000

Invested in
Business-type Activities Capital Assets,
Net of Debt Restricted Unrestricted Total
Invested in Capital Assets, Net of Debt:
Capital Assets (net) $ 7,050,000 $ 7,050,000
Less Revenue Bonds (3,210,000) (3,210,000)
Restricted Net Assets: 190,000 190,000
Unrestricted (plug) 1,951,000 1,951,000

Total Net Assets $ 3,840,000 190,000 1,951,000 5,981,000

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Chapter 08 - Government-Wide Statements, Capital Assets, Long-Term Debt

8-8. CITY OF NORTHERN PINES

STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2014
PROGRAM REVENUES NET (EXPENSE) REVENUE AND CHANGE IN NET ASSETS
CHARGES FOR OPERATING GOVERNMENTAL BUSINESS-TYPE
FUNCTIONS/PROGRAMS EXPENSES SERVICES GRANTS ACTIVITIES ACTIVITIES TOTAL
GOVERNMENTAL ACTIVITIES:
GENERAL GOVERNMENT $11,760,000 $1,110,000 $(10,650,000) $ $ (10,650,000)
PUBLIC SAFETY 23,900,000 210,000 $ 798,000 (22,892,000) (22,892,000)
PUBLIC WORKS 11,290,000 (11,290,000) (11,290,000)
HEALTH AND SANITATION 6,210,000 2,555,000 1,210,000 (2,445,000) (2,445,000)
CULTURE AND RECREATION 4,198,000 2,198,000 (2,000,000) (2,000,000)
INTEREST ON LONG-TERM DEBT 721,000 ________ ________ ( 721,000) ( 721,000)
TOTAL GOVERNMENTAL
ACTIVITIES 58,079,000 6,073,000 2,008,000 (49,998,000) (49,998,000)
BUSINESS-TYPE ACTIVITIES:
WATER AND SEWER SYSTEM 10,700,000 11,578,000 ---- ---- 878,000 878,000
PARKING SYSTEM 419,000 398,000 ---- ---- (21,000) ( 21,000)
TOTAL BUSINESS-TYPE
ACTIVITIES 11,119,000 11,976,000 --- --- 857,000 857,000
TOTAL $69,198,000 $18,049,000 $2,008,000 (49,998,000) 857,000 (49,141,000)
GENERAL REVENUES:
PROPERTY TAXES 27,112,000 27,112,000
SALES TAXES 20,698,000 20,698,000
INVESTMENT EARNINGS 319,000 319,000
SPECIAL ITEM-GAIN ON SALE OF LAND 1,250,000 1,250,000
TRANSFERS 700,000 (700,000) -

TOTAL GENERAL REVENUES,

SPECIAL ITEMS, AND TRANSFERS 49,760,000 (381,000) 49,379,000
CHANGE IN NET ASSETS (238,000) 476,000 238,000
NET ASSETS, JULY 1, 2013 14,000,000 17,000,000 31,000,000
NET ASSETS, JUNE 30, 2014 $13,762,000 $17,476,000 $31,238,000

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 Chapter 08 - Government-Wide Statements, Capital Assets, Long-Term Debt
8-9.
CITY OF GRINDERS SWITCH
WORKSHEET ENTRIES
DEBITS CREDITS
1. LAND 9,950,000
BUILDINGS 32,355,000
IMPROVEMENTS OTHER THAN BUILDINGS 16,111,000
EQUIPMENT 11,554,000
ACCUMULATED DEPRECIATION, CAPITAL ASSETS 23,400,000
NET ASSETS 46,570,000
2. BUILDINGS 4,800,000
IMPROVEMENTS OTHER THAN BUILDINGS 1,313,000
EXPENDITURES-CAPITAL OUTLAY 6,113,000
3. DEPRECIATION EXPENSE 2,769,825
ACCUMULATED DEPRECIATION-BUILDINGS
(32,355,000/40) 808,875
ACCUMULATED DEPRECIATION-IMPROVEMENTS
OTHER THAN BUILDINGS (16,111,000/20) 805,550
ACCUMULATED DEPRECIATION-EQUIPMENT
(11,554,000/10)
1,155,400
4. SPECIAL ITEM -PROCEEDS FROM SALE OF LAND 600,000
LAND 535,000
SPECIAL ITEM: GAIN ON SALE OF LAND 65,000

5. NET ASSETS 4,036,000

BONDS PAYABLE 4,000,000
PREMIUM ON BONDS PAYABLE 36,000

6. PREMIUM ON BONDS PAYABLE 3,600

INTEREST EXPENSE 3,600

BONDS PAYABLE 400,000

EXPENDITURES-PRINCIPAL 400,000
7. OTHER FINANCING SOURCES-PROCEEDS OF BONDS 1,700,000
BONDS PAYABLE 1,700,000

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Chapter 08 - Government-Wide Statements, Capital Assets, Long-Term Debt
8-10.
CITY OF SOUTH PITTSBURGH
WORKSHEET ENTRIES
DEBITS CREDITS
1. REVENUES-PROPERTY TAXES 99,400
NET ASSETS 99,400

2. DEFERRED REVENUES-PROPERTY TAXES 112,000

REVENUES-PROPERTY TAXES 112,000

3. PUBLIC SAFETY EXPENSE 175,000

COMPENSATED ABSENCES PAYABLE 175,000

4. PUBLIC SAFETY EXPENSE 22,000

NET PENSION OBLIGATION 22,000

5. TRANSFERS IN 1,200,000
TRANSFERS OUT 1,200,000

8-11.
CITY OF SOUTHERN PINES
WORKSHEET ENTRIES
DEBITS CREDITS
1. CASH 250,000
INVESTMENTS 125,000
DUE FROM GENERAL FUND* 15,000
INVENTORIES 325,000
CAPITAL ASSETS (NET) 1,340,000 50,000
ACCOUNTS PAYABLE 700,000
LONG-TERM ADVANCE FROM ENTERPRISE FUND 1,305,000
NET ASSETS
DUE TO INTERNAL SERVICE FUND (GENERAL FUND) 15,000
* DUE FROM GENERAL FUND (INTERNAL SERVICE FUND) 15,000

2. NET ASSETS 3,750

INTEREST REVENUE 3,750
3. NET ASSETS 36,000
EXPENDITURES-GENERAL GOVERNMENT 12,000
EXPENDITURES-PUBLIC SAFETY 12,000
EXPENDITURES-PUBLIC WORKS 12,000

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 Chapter 08 - Government-Wide Statements, Capital Assets, Long-Term Debt
8-12
SHENANDOAH CITY
WORKSHEET ENTRIES
FOR THE YEAR ENDED DECEMBER 31, 2014
DEBITS CREDITS
CAPITAL LAND 7,230,000
ASSETS BUILDINGS 25,600,000
INFRASTRUCTURE 24,500,000
EQUIPMENT 6,370,000
ACCUMULATED DEPRECIATION - BUILDINGS 13,000,000
ACCUMULATED DEPRECIATION - INFRASTRUCTURE 9,000,000
ACCUMULATED DEPRECIATION - EQUIPMENT 3,100,000
NET ASSETS 38,600,000

EQUIPMENT 856,700
BUILDINGS 4,117,450
EXPENDITURES-CAPITAL OUTLAY 4,974,150

DEPRECIATION EXPENSE 2,612,500

ACCUMULATED DEPRECIATION - BUILDINGS 1,100,000
ACCUMULATED DEPRECIATION - INFRASTRUCTURE 975,000
ACCUMULATED DEPRECIATION - EQUIPMENT 537,500

LONG NET ASSETS 6,000,000

TERM BONDS PAYABLE 6,000,000
DEBT
OTHER FINANCING SOURCES - PROCEEDS OF BONDS 4,000,000
OTHER FINANCING SOURCES-PREMIUM ON BONDS 50,000
BONDS PAYABLE 4,000,000
PREMIUM ON BONDS PAYABLE 50,000

BONDS PAYABLE 400,000

EXPENDITURES-DEBT SERVICE-BOND PRINCIPAL 400,000

INTEREST INTEREST EXPENSE 268,000

ACCRUED INTEREST PAYABLE 268,000
[(6,000,000 – 400,000) * 6% * 6/12] + [(4,000,000) * 5% * 6/12]

NET ASSETS 180,000

INTEREST EXPENSE 180,000
(2013 ACCRUAL REVERSAL)

PREMIUM ON BONDS PAYABLE 2,500

INTEREST EXPENSE 2,500

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 Chapter 08 - Government-Wide Statements, Capital Assets, Long-Term Debt
8-12 (CONTINUED).
SHENANDOAH CITY
WORKSHEET ENTRIES
(CONTINUED)

DEBITS CREDITS
DEFERRED REVENUES-PROPERTY TAXES 37,000
REVENUES NET ASSETS 37,000

DEFERRED REVENUES 46,000

REVENUES-PROPERTY TAXES 46,000

ACCRUED NET ASSETS 29,500

LIABILITIES ACCRUED LANDFILL CLOSURE AND 29,500
POSTCLOSURE CARE COSTS

PUBLIC WORKS EXPENSES (CLOSURE AND POSTCLOSURE 10,000

CARE)
ACCRUED LANDFILL CLOSURE AND 10,000
POSTCLOSURE CARE COSTS

INTERNAL CASH 35,000

SERVICE DUE FROM OTHER FUNDS 21,200
ACTIVITIES INVENTORIES 17,000
LAND 25,000
BUILDINGS 44,000
EQUIPMENT 21,000
ACCUMULATED DEPRECIATION – BUILDINGS 13,200
ACCUMULATED DEPRECIATION - EQUIPMENT 12,600
ACCOUNTS PAYABLE 18,400
ADVANCE FROM WATER UTILITY FUND 10,000
NET ASSETS 109,000

NET ASSETS 5,000

INVESTMENT INCOME 5,000

EXPENDITURES-CURRENT-GENERAL GOVERNMENT 3,000

NET ASSETS 3,000

INTERFUND TRANSFERS IN 137,450

BALANCES TRANSFERS OUT 137,450

DUE TO OTHER FUNDS 10,200

DUE FROM OTHER FUNDS 10,200

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Chapter 08 - Government-Wide Statements, Capital Assets, Long-Term Debt
8-13 PART 1 SOLUTIONS TO THE EXCEL BASED EXERCISES ARE ALSO AVAILABLE IN EXCEL ON
THE INSTRUCTOR’S WEBSITE

WORKSHEET JOURNAL ENTRIES TO CONVERT

TO THE ACCRUAL BASIS OF ACCOUNTING

A. CAPITAL ASSETS (NET) 7,752,000

NET ASSETS BEGINNING OF YEAR 7,752,000

DEPRECIATION EXPENSE 315,000

CAPITAL ASSETS (NET) 315,000

CAPITAL ASSETS (NET) 616,600

CAPITAL OUTLAY (EXPENDITURE) 616,600

B. NO BEGINNING LONG TERM DEBT - -

PROCEEDS FROM SALE OF BONDS 700,000

PROCEEDS FROM BOND PREMIUM 15,000
BONDS PAYABLE 700,000
BOND PREMIUM 15,000

BONDS PAYABLE 17,500

EXPENDITURE - PRINCIPLE ON BONDS 17,500

INTEREST EXPENSE 10,238

INTEREST PAYABLE 10,238
INTEREST FROM OCT. 1 TO DEC. 31
(700,000 - 17,500) * 6% * 3/12 = 10,238

PREMIUM ON BONDS PAYABLE 1,500

INTEREST EXPENSE 1,500

C. DEFERRED PROPERTY TAXES 19,150

PROPERTY TAX REVENUE 19,150

PROPERTY TAX REVENUE 18,700

NET ASSETS BEGINNING OF YEAR 18,700

D. TRANSFERS IN 53,500
TRANSFERS OUT 53,500

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Chapter 08 - Government-Wide Statements, Capital Assets, Long-Term Debt
PART A CONTINUED

E. CASH 12,300
DUE FROM OTHER FUNDS 19,800
SUPPLIES INVENTORY 7,500
CAPITAL ASSETS (NET) 19,500
ACCOUNTS PAYABLE 2,300
WAGES PAYABLE 420
INTEREST PAYABLE 600
BANK NOTE PAYABLE 12,000
ADVANCE FROM ENTERPRISE FUND 16,000
NET ASSETS 27,780

NET ASSETS 3,180

GENERAL GOVERNMENT EXPENDITURES 3,180

INTEREST EXPENSE 600

NET ASSETS 600

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Chapter 08 - Government-Wide Statements, Capital Assets, Long-Term Debt

8-13 PART C
JEFFERSON COUNTY
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED 12-31-2014

PROGRAM REVENUES NET (EXPENSE) REVENUE AND CHANGE IN NET ASSETS

CHARGES OPERATIONAL CAPITAL

FOR GRANTS AND GRANTS AND GOVERNMENTAL BUSINESS-TYPE
EXPENSES SERVICES CONTRIBUTIONS CONTRIBUTIONS ACTIVITIES ACTIVITIES TOTAL
FUNCTIONS/PROGRAMS
GOVERNMENTAL ACTIVITIES:
GENERAL GOVERNMENT $ 177,830 $ - $ (177,830) $ (177,830)
LIBRARY 14,000 - (14,000) (14,000)
DEPRECIATION 315,000 (315,000) (315,000)
INTEREST 30,338 (30,338) (30,338)
TOTAL GOVERNMENTAL ACTIVITIES 537,168 - - - (537,168) (537,168)
BUSINESS TYPE ACTIVITIES
WATER AND SEWER 768,000 805,000 37,000 37,000
TOTAL GOVERNMENT $ 1,305,168 $ 805,000 $ - $ - $ (537,168) $ 37,000 (500,168)

GENERAL REVENUES
TAXES:
PROPERTY TAXES 263,650 263,650
INTERGOVERNMENTAL REVENUES 250,000 250,000
INVESTMENT INCOME 20,400 20,400
TOTAL GENERAL REVENUES 534,050 - 534,050
CHANGE IN NET ASSETS (3,118) 37,000 33,882
NET ASSETS, BEGINNING 8,552,658 41,650 8,594,308
NET ASSETS, ENDING $ 8,549,540 $ 78,650 $ 8,628,190

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Chapter 08 - Government-Wide Statements, Capital Assets, Long-Term Debt
8-13 PART 3 (CONTINUED)

JEFFERSON COUNTY
STATEMENT OF NET ASSETS
DECEMBER 31, 2014

GOVERNMENTAL BUSINESS-TYPE
ACTIVITIES ACTIVITIES TOTAL
ASSETS
CASH $ 419,428 $ 23,000 $ 442,428
INVESTMENTS 500,900 - 500,900
TAXES RECEIVABLE (NET) 58,420 - 58,420
INTEREST RECEIVABLE 2,500 - 2,500
INTERNAL BALANCES CURRENT 19,800 (19,800) -
DUE FROM OTHER GOVERNMENTS 250,000 - 250,000
INVENTORIES 7,750 18,000 25,750
INTERNAL BALANCES LONG-TERM (16,000) 16,000 -
CAPITAL ASSETS, NET OF ACCUMULATED DEPRECIATION 8,073,100 255,000 8,328,100
TOTAL ASSETS $ 9,315,898 $ 292,200 $ 9,608,098

LIABILITIES
ACCOUNTS PAYABLE 4,900 11,700 16,600
WAGES PAYABLE 2,620 1,850 4,470
ACCRUED INTEREST PAYABLE 10,838 - 10,838
CONTRACT PAYABLE 40,000 - 40,000
BANK NOTE PAYABLE 12,000 - 12,000
BONDS PAYABLE 682,500 200,000 882,500
PREMIUM ON BONDS SOLD 13,500 - 13,500
TOTAL LIABILITIES 766,358 213,550 979,908

NET ASSETS

INVESTED IN CAPITAL ASSETS, NET OF RELATED DEBT 7,377,100 55,000 7,432,100

RESTRICTED 980,000 - 980,000
UNRESTRICTED 192,440 23,650 216,090
TOTAL NET ASSETS $ 8,549,540 $ 78,650 $ 8,628,190

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Chapter 08 - Government-Wide Statements, Capital Assets, Long-Term Debt
8-14 PART 1
WORKSHEET JOURNAL ENTRIES TO CONVERT
TO THE ACCRUAL BASIS OF ACCOUNTING

A1 CAPITAL ASSETS (NET) 16,590,000

NET ASSETS - BEGINNING 16,590,000

A2 DEPRECIATION EXPENSE 2,200,000

CAPITAL ASSETS (NET) 2,200,000

A3 CAPITAL ASSETS (NET) 10,980,818

CAPITAL EXPENDITURES 10,980,818

B1 NET ASSETS - BEGINNING 11,596,000

BONDS PAYABLE 11,596,000

B2 OFS: PROCEEDS FROM ISSUANCE OF DEBT 9,675,400

BONDS PAYABLE 9,675,400

B3 BONDS PAYABLE 924,326

EXPENDITURE - DEBT PRINCIPAL 924,326

B4 INTEREST EXPENSE 167,000

ACCRUED INTEREST PAYABLE 167,000

B5 NET ASSETS - BEGINNING OF YEAR 186,500

INTEREST EXPENSE 186,500

C1 DEFERRED PROPERTY TAX REVENUE 185,064

PROPERTY TAX REVENUE 185,064

C2 PROPERTY TAX REVENUE 188,400

NET ASSETS - BEGINNING 188,400

D1 NET ASSETS - BEGINNING 1,471,480

LANDFILL CLOSURE COST LIABILITY 1,471,480

D2 PUBLIC WORKS EXPENSE 318,520

LANDFILL CLOSURE COST LIABILITY 318,520

E1 OFS: TRANSFERS FROM OTHER FUNDS 2,730,144

OFU: TRANSFERS TO OTHER FUNDS 2,730,144

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Chapter 08 - Government-Wide Statements, Capital Assets, Long-Term Debt
8-14 PART 3

CITY OF COTTONWOOD
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED DECEMBER 31, 2014
PRIMARY GOVERNMENT
NET (EXPENSE) REVENUE AND CHANGE IN NET ASSETS
CHARGES BUSINESS-
FOR GOVERNMENTAL TYPE
FUNCTIONS/PROGRAMS EXPENSES SERVICES ACTIVITIES ACTIVITIES TOTAL
GOVERNMENTAL ACTIVITIES:
GENERAL GOVERNMENT 3,074,532 1,156,497 (1,918,035) - (1,918,035)
JUDICIAL ADMINISTRATION 4,400,325 44,018 (4,356,307) - (4,356,307)
PUBLIC SAFETY 6,528,125 275,492 (6,252,633) - (6,252,633)
PUBLIC WORKS 4,943,945 - (4,943,945) - (4,943,945)
HEALTH AND WELFARE 4,418,294 - (4,418,294) - (4,418,294)
EDUCATION 3,887,834 - (3,887,834) - (3,887,834)
PARKS AND RECREATION 3,155,325 604,359 (2,550,966) - (2,550,966)
COMMUNITY DEVELOPMENT 1,793,013 51,611 (1,741,402) - (1,741,402)
DEPRECIATION EXPENSE 2,200,000 (2,200,000) - (2,200,000)
INTEREST ON LONG-TERM DEBT 1,136,318 - (1,136,318) - (1,136,318)

TOTAL GOVERNMENTAL ACTIVITIES 35,537,711 2,131,977 (33,405,734) - (33,405,734)

BUSINESS TYPE ACTIVITIES
WATER 4,041,987 5,385,233 1,343,246 1,343,246
SOLID WASTE 1,556,633 1,851,433 294,800 294,800
PARKING 481,869 461,107 (20,762) (20,762)

TOTAL BUSINESS-TYPE ACTIVITIES 6,080,489 7,697,773 - 1,617,284 1,617,284

TOTAL PRIMARY GOVERNMENT 41,618,200 9,829,750 (33,405,734) 1,617,284 (31,788,450)

GENERAL REVENUES
PROPERTY TAXES 24,602,114 24,583,914
OTHER LOCAL TAXES 11,403,125 11,403,125
MISCELLANEOUS 1,302,422 1,302,422

TRANSFERS (526,755) 526,755 -

TOTAL GENERAL REVENUES 36,780,906 36,762,706 526,755
CHANGE IN NET ASSETS 3,478,676 3,356,972 2,144,039
NET ASSETS, BEGINNING 18,220,062 17,271,149 29,897,624
NET ASSETS, ENDING 21,698,738 20,628,121 32,041,663

SHADED AREAS ARE BUSINESS-TYPE ACTIVITIES. THE AMOUNTS ARE ASSUMED AND NOT PART OF
THE EXERCISE.

8-16
Chapter 08 - Government-Wide Statements, Capital Assets, Long-Term Debt
8-14 PART 3 CONTINUED
CITY OF
COTTONWOOD
STATEMENT OF NET ASSETS
AS OF DECEMBER 31, 2014

PRIMARY GOVERNMENT
BUSINESS-
GOVERNMENTAL TYPE PRIMARY
ASSETS ACTIVITIES ACTIVITIES GOVERNMENT
CASH AND CASH EQUIVALENTS 8,161,351 4,025,000 12,186,351
INVESTMENTS 3,312,992 5,871,042 9,184,034
INVENTORY 33,126 71,042 104,168
RECEIVABLES (NET) -
TAXES RECEIVABLE 2,872,611 2,872,611
INTEREST RECEIVABLE 693,392 26,573 719,965
DUE FROM OTHER GOVERNMENTS 1,328,448 292,775 1,621,223
OTHER ASSETS 23,747 23,747
INVESTMENT IN PERMANENT ENDOWMENT 3,875,600 - 3,875,600
CAPITAL ASSETS (NET OF ACCUMULATED
DEPRECIATION) 24,165,191 42,142,915 42,142,915
TOTAL ASSETS 45,672,085 52,429,347 98,101,432

LIABILITIES
ACCOUNTS PAYABLE 2,320,134 493,849 2,813,983
ACCRUED WAGES AND BENEFITS 419,756 473,168 892,924
DEFERRED PROPERTY TAXES - -
ACCRUED INTEREST PAYABLE 167,000 167,000
LANDFILL POST CLOSURE CARE COSTS LIABILITY 1,580,900 1,790,000 562,480
BONDS PAYABLE 20,347,074 18,858,187 39,205,261
TOTAL LIABILITIES 25,043,964 20,387,684 45,431,648

NET ASSETS
INVESTED IN CAPITAL ASSETS NET OF RELATED DEBT 5,810,235 5,023,744 23,284,728
RESTRICTED 4,447,614 - 4,447,614
UNRESTRICTED 11,156,763 8,756,935 19,913,698
TOTAL NET ASSETS 20,628,121 32,041,663 52,669,784

SHADED AREAS ARE BUSINESS-TYPE ACTIVITIES. THE AMOUNTS ARE ASSUMED AND NOT PART OF
THE EXERCISE.

8-17