Question

Prepare a reconciliation of Net Change in Governmental Fund Balances (the General Fund, Capital Projects Funds, Debt Service Fund, Special Revenues Funds and Permanent Funds) to change in Governmental Net Assets (the 5 funds just cited and the Internal Services Funds, which all reflect government activities.) [An internal service fund is a fund used in governmental accounting to track goods or services shifted between departments on a cost reimbursement basis. An example of an internal service fund is a maintenance department that provides equipment maintenance services to other departments.]

Reconciliation of Net Change in

Governmental Fund Balances to

Change in Governmental Net Assets

Governmental Fund Balances as of

December 31, 2019:                                                                         $6,000,000 credit

Reconciling Items:

1. Increase in Deferred Revenue all related to

Property tax located on the Balance

Sheet of the General Fund: $400,000                                     ______________

2. Expenditures related to Capital Asset

Purchases. Occurred in the General Fund:

$10,000,000                                                                            ______________

3. Depreciation expenses on capital assets (never

taken by the 5 governmental funds):

$2,000,000                                                                              ______________

4. Proceeds sent to the Capital Projects Fund from

the issuance of general long-term capital debt

(long-term debt is not reflected in the

General Fund): $5,000,000                                                     ______________

5. Expenditures paid through the Debt Service

Fund to pay principal on capital related debt:

$200,000                                                                                ______________

6. Increase in liability for compensated absences

not accrued in any of the 5 governmental

Funds: $60,000                                                                      ______________

                                   

7. Internal Service Fund Net Assets

As of December 31, 2019:

$100,000                                                                                 ______________

Statement of Net Assets –

            Governmental Activities as of

December 31, 2019:                                                                          ______________

Answer 1

Reconciliation of Net Change in

Governmental Fund Balances to

Change in Governmental Net Assets

Governmental Fund Balances as of

December 31, 2019:                                                                         $6,000,000 credit

Reconciling Items:

Increase in Deferred Revenue all related to

Property tax located on the Balance

Sheet of the General Fund: $400,000 (+) $ 400,000

Expenditures related to Capital Asset

Purchases. Occurred in the General Fund:

$10,000,000 (+) $ 10,000,000

Depreciation expenses on capital assets (never

taken by the 5 governmental funds):

$2,000,000 (-)  $2,000,000

Proceeds sent to the Capital Projects Fund from

the issuance of general long-term capital debt

(long-term debt is not reflected in the

General Fund): $5,000,000 (-) $5,000,000

Expenditures paid through the Debt Service

Fund to pay principal on capital related debt:

$200,000 (-) $200,000

Increase in liability for compensated absences

not accrued in any of the 5 governmental

Funds: $60,000 (+) $60,000

                                   

Internal Service Fund Net Assets

As of December 31, 2019:

$100,000 (+) $100,000

Statement of Net Assets –

            Governmental Activities as of

December 31, 2019: $,93,60,000