Question

1. during the year ended december 31, 2012, the town of jamestown had the following selected transaction :

a. the general fund made a $100,000 advance to an internal service fund. the internal service fund will repay the advance in 2013.

b .the water utility enterprise fund billed the general fund $25,000 for water usage.

c. the general fund transferred $30,000 to a debt service fund to pay interest on general obligation bonds

on Jamestown's government-wide statement of activities for the year ended december 31, 2012, what amount should be reported for transfer?

2.during the year ended December 31, 2012, the town of Harrisville had the following selected transaction :

a. the general fund made a permanent transfer of $ 100,000 to an enterprise fund. Te enterprise fund used the amount transferred to acquire capital assets.

b. the general fund transferred $1,000,000 to a capital projects fund for the town's portion of the cost for the renovation of the town hall.

c. the general fund was reimbursed $5,000 by an enterprise fund  for expenses paid by the general fund that were properly charged as operating expenses of the enterprise fund.

on Harrisville's government-wide statement of activities for the year ended december 31, 2012, what amount should be reported as transfer?

Answer 1

Following are requirements for transfers to be reported on the government-wide statement of activities:

1. Transfer must be between governmental activities and business type activities

2. Transfer from governmental activities to business type activities, or transfer from business type activities to governmental activities shall be permanent transfer or recurring transfer

1) Answer: 0

Explanation:

a) $100,000 advance to an internal service fund is a kind of loan given and not to be reported in government wide statement of net position because, while preparing the government-wide statement of net position and this transaction would be eliminated as general fund asset against internal service fund liability.

b) $25,000 billing by the water utility enterprise is a external quasi transaction and not a transfer. It will be recorded as expense in general fund, and also $25,000 will be recorded as revenue under business activities.

c) $30,000 transferred from the general fund to a debt service fund is a transfer but while preparing government-wide statement of net position, effect of the transfer is eliminated because both the finds are to be reported under governmental activities.

• So in aggregate amount of transfer to be reported on December 31, 2012 is $0

2) Answer: $100,000

Explanation:

a) $100,000 permanent transfer from the general fund to an enterprise fund would be reported as a transfer on the statement of activities.

b) $1,000,000 transfer from the general fund to a capital project fund will not be reported as a transfer on the statement of activities because both the activities are governmental activities.

c) $5,000 reimbursed by the enterprise fund will not be reported as transfer in statement of activities, this refund will reduce governmental activities expenses.

So in aggregate amount of transfer to be reported on December 31, 2012 is $100,000

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