Question

In: Accounting

Here is information for a county government: Governmental funds Enterprise funds Total assets and deferred outflows...

Here is information for a county government:

Governmental funds

Enterprise funds

Total assets and deferred outflows

$ 45,000,000

$ 40,000,000

Total liabilities and deferred inflows

44,000,000

38,000,000

Total revenues

250,000,000

290,000,000

Total expenditures/expenses

242,000,000

260,000,000


The county has four special revenue funds, with the following characteristics:

Beach preservation

Health education

Community protection

Emergency

call service

Total assets and deferred outflows

$ 2,000,000

$ 4,000,000

$ 4,800,000

$ 1,900,000

Total liabilities and deferred inflows

1,000,000

3,500,000

1,800,000

1,100,000

Total revenues

20,000,000

30,000,000

30,000,000

26,000,000

Total expenditures

15,000,000

26,000,000

25,000,000

24,000,000


Which of these special revenue funds also meet the second criterion for reporting as a major fund in the governmental funds financial statements, and therefore will be reported as major funds?

A.

Health education, community protection, and emergency call service funds

B.

Beach preservation and health education funds

C.

Health education and community protection funds

D.

Health education fund only

Solutions

Expert Solution

The second criteria define major fund as when Total assets, liabilities, revenues, or expenditures/expenses of the individual governmental fund or enterprise fund are at least 5 percent of the corresponding total for all governmental and enterprise funds combined.

5% of total assets = 5% of (45+40)mn = 4,250,000

5% of total liabilities = $ 4,100,000

5% of total revenues = 27,000,000

5% of total expenditures = $ 25,100,000

Above threshold has to be checked in special revenue funds whether any fund crosses these these limits.

Community protection crosses assets threshold

Health education and community protection crosses total revenues threshold of 27,000,000.

Health education crosses expenditures threshold.

Hence, correct option is c. Health education and community protection funds


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