Question

Change in Net Position of Governmental Activities . You have been provided with the following information concerning operating activity for Annette County. For the year ended June 30,2017, the net change in total governmental fund balances was $(289,200), and the change in net position of governmental activities was $194,300. During the year, Annette issued $2,000,000 in general obligation bonds at a premium of101. The bonds are to be used for a construction project. The county acquired$2,750,000 in capital assets and sold capital assets with a book value of$563,000 for $570,900. At the beginning of the period accrued liabilities were$470,000 and at the end of the period they totaled $494,000. Depreciation on capital assets totaled $595,000. Revenue accrued for the period but not available for use totaled $364,000.

Using the information provided, prepare a reconciliation of the change in governmental fund balance to the change in net position of governmental activities.

Answer 1

ANNETTE COUNTY
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances—Governmental Funds to the Statement of Activities
For the Year Ended June 30, 2017
Net change in fund balances—governmental funds	$ (289,200)
Amounts reported for governmental activities in the statement of activities are different because:
Governmental funds report capital outlays as expenditures	2,155,000
Transaction involving Capital Asset resulting in a gain	7,900
Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position.	(2,020,000)
An increase in accrued liabilities indicates that expenditures recorded in the governmental funds exceed expenses for the current period	(24,000)
Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds	364,600
Change in net position of governmental activities	$ 194,300

working Note:

Calculation of Transaction involving Capital Asset resulting in a gain

$570,900 - $563,000 = $ 7,900

Calculation of Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position.

Bonds Issued $2000000 at a premium of 101

therefore correct amount of bond issued $2,000,000 /100 = 20,000 bonds

20,000 bonds X Premium $1 = $20,000

So $ 2,000,000 + $ 20,000 = $ 2,020,000

$ 2,020,000