Solution Manual For Essentials of Accounting for Governmental and Not-for-Profit Organizations, 14th Edition

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Chapter 01-Introduction to Accounting and Financial Reporting for Governmental and Not-for-ProfitOrganizations1-1INSTRUCTOR’SMANUALTOACCOMPANYESSENTIALSOFACCOUNTING FORGOVERNMENTALANDNOT-FOR-PROFITORGANIZATIONS:14THEDITIONPREPARED BY:PAULA.COPLEYMARYLORETTAMANKTELOW

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Chapter 01-Introduction to Accounting and Financial Reporting for Governmental and Not-for-ProfitOrganizations1-2CHAPTER1Introduction to Accounting and Financial Reporting forGovernmental andNot-for-Profit Organizations1-1.THE SOLUTION TO THIS AND THE FIRST EXERCISE OFCHAPTERS2THROUGH9WILLDIFFER FROM STUDENT TO STUDENT ASSUMING EACH HAS A DIFFERENTCAFR.1-2.1)ORGANIZATIONALPURPOSES:WHILE THE PURPOSE OF A COMMERCIAL BUSINESSIS TO GENERATE A PROFIT FOR THE BENEFIT OF ITS OWNERS,GOVERNMENTS EXISTFOR THE WELL BEING OF CITIZENS BY PROVIDING PUBLIC SERVICES–WHETHER ORNOT THE SERVICES ARE PROFITABLE UNDERTAKINGS.2)SOURCES OFREVENUES:GOVERNMENTS DERIVE MANY OF THEIR RESOURCESFROM TAXES.INDIVIDUALS AND BUSINESSES PAY TAXES TO AVOID PENALTY,NOTVOLUNTARILY BECAUSE THEY PERCEIVE GOVERNMENT SERVICES TO BE OF VALUEAND FAIRLY PRICED.SINCE TAXES DO NOT INVOLVE AN EARNINGS PROCESS,THETIMING OF THE RECOGNITION OF TAX REVENUE IS NOT ALWAYS CLEAR.3)POTENTIAL FORLONGEVITY:BECAUSE THEU.S.AND STATE CONSTITUTIONSGRANT STATE AND LOCAL GOVERNMENTS THE ABILITY TO TAX,GOVERNMENTSVERY RARELY GO OUT OF BUSINESS.THIS LONG-TERM VIEW OF OPERATIONSCHANGES THE FOCUSOF ACCOUNTING FROM ONE OF NEAR-TERM RECOVERY OFAMOUNTS INVESTED IN ASSETS TO A LONGER-TERM FOCUS ON THE SUSTAINABILITYOF SERVICES AND THE ABILITY TO MEET FUTURE DEMAND.4)RELATIONSHIP WITHSTAKEHOLDERS:TAXES ARE CREATED THROUGH THELEGISLATIVE PROCESS BY OFFICIALS ELECTED BY THE CITIZENS.BECAUSE CITIZENSAND BUSINESSES ARE THEN REQUIRED TO PAY THESE TAXES,GOVERNMENTS HAVEAN OBLIGATION TO DEMONSTRATE ACCOUNTABILITY FOR THESE PUBLIC FUNDS.5)ROLE OF THEBUDGET:GOVERNMENT BUDGETS ARE EXPRESSIONS OF PUBLICPOLICY AND OFTEN CARRY THE AUTHORITY OF LAW,PREVENTING PUBLIC OFFICIALSFROM SPENDING OUTSIDE THEIR BUDGETARY AUTHORITY.THE INCREASEDIMPORTANCE OF BUDGETS IS REFLECTED IN GOVERNMENT FINANCIAL REPORTS BY AREQUIRED REPORT COMPARING BUDGETED AND ACTUAL AMOUNTS.1-3.THE THREE STANDARDS SETTING BODIES IN QUESTION ARE THEFEDERALACCOUNTINGSTANDARDSACCOUNTINGADVISORYBOARD(FASAB),THEGOVERNMENTALACCOUNTINGSTANDARDSBOARD(GASB),AND THEFINANCIALACCOUNTINGSTANDARDSBOARD(FASB).THEFASABESTABLISHES ACCOUNTINGAND REPORTINGSTANDARDS FOR THE FEDERAL GOVERNMENT AND ITS AGENCIES UNLESS OBJECTED TOBY ONE OF THE"PRINCIPALS"(THE DIRECTOR OF THE OFFICE OF MANAGEMENT ANDBUDGET,THE COMPTROLLER GENERAL OF THE UNITED STATES(GAO),AND THESECRETARY OF THE TREASURY).WHEN THE"PRINCIPALS"APPROVE,THEFASABSTANDARDS BECOMEGAAP.THEGASBSETS ACCOUNTING AND FINANCIALREPORTING STANDARDS FOR STATE AND LOCAL GOVERNMENTAL ORGANIZATIONS,INCLUDING THOSE NOT-FOR-PROFIT ORGANIZATIONS THAT ARE DETERMINED TO BESTATE AND LOCAL GOVERNMENTS.THEFASBSETS ACCOUNTING AND FINANCIALREPORTING STANDARDS FORPROFIT SEEKING BUSINESSES AND FORNONGOVERNMENTAL,NOT-FOR-PROFIT ENTITIES.

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Chapter 01-Introduction to Accounting and Financial Reporting for Governmental and Not-for-ProfitOrganizations1-31-4.THE DEFINITION OF A GOVERNMENT,AS AGREED TO BY THEFASBAND THEGASBISAS FOLLOWS:“PUBLIC CORPORATIONS AND BODIES CORPORATE AND POLITIC ARE GOVERNMENTALORGANIZATIONS.OTHER ORGANIZATIONS ARE GOVERNMENTAL ORGANIZATIONS IFTHEY HAVE ONE OR MORE OF THE FOLLOWING CHARACTERISTICS:1.POPULAR ELECTION OFOFFICERS OR APPOINTMENT(OR APPROVAL)OF ACONTROLLING MAJORITY OF THE MEMBERS OF THE ORGANIZATION’SGOVERNING BODY BY OFFICIALS OF ONE OR MORE STATE OR LOCALGOVERNMENTS;2.THE POTENTIAL FOR UNILATERAL DISSOLUTION BY A GOVERNMENT WITH THENET ASSETS REVERTING TO A GOVERNMENT,OR3.THE POWER TO ENACT AND ENFORCE A TAX LEVY.FURTHERMORE,ORGANIZATIONS ARE PRESUMED TO BE GOVERNMENTAL IF THEY HAVETHE ABILITY TO ISSUE DIRECTLY(RATHER THAN THROUGH A STATE OR MUNICIPALAUTHORITY)DEBT THAT PAYS INTEREST EXEMPT FROM FEDERAL TAXATION.

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Chapter 01-Introduction to Accounting and Financial Reporting for Governmental and Not-for-ProfitOrganizations1-41-5.THE SOURCES OFAUTHORITATIVEGAAPFOR STATE AND LOCAL GOVERNMENTS ARE:−CATEGORYA:GASBSTATEMENTS(ANDINTERPRETATIONS)−CATEGORYB:GASBIMPLEMENTATIONGUIDES,GASBTECHNICALBULLETINS AND LITERATURE OF THEAMERICANINSTITUTE OFCERTIFIEDPUBLICACCOUNTANTS(AICPA)SPECIFICALLY CLEARED BY THEGASBIF THE ACCOUNTING TREATMENT FOR A GIVEN TRANSACTION IS NOT SPECIFIED BY ASTATEMENT INCATEGORYA,A STATE AND LOCAL GOVERNMENT SHOULD CONSIDERWHETHER IT ISCOVERED BY ONE OF THE SOURCES IDENTIFIED INCATEGORYB.IF THEACCOUNTING TREATMENT IS NOT SPECIFIED WITHIN ONE OF THESE AUTHORITATIVESOURCES,THE GOVERNMENT SHOULD CONSIDER WHETHER THE TRANSACTION ISSUFFICIENTLY SIMILAR TO ONES COVERED BY ONE OF THE AUTHORITATIVE SOURCESTHAT A SIMILAR ACCOUNTING TREATMENT CAN BE APPLIED.IF NOT,THEGOVERNMENT MAY USE NON-AUTHORITATIVE SOURCES FOR GUIDANCE,INCLUDING:−GASBCONCEPTSTATEMENTS,−FASB,FASAB,ORINTERNATIONALSTANDARDSBOARDPRONOUNCEMENTS,−AICPALITERATURE NOT SPECIFICALLY CLEARED BY THEGASB,−OTHER SOURCES PROVIDED BYPROFESSIONAL ORGANIZATIONS,REGULATORY AGENCIES,TEXTBOOKS,AND PUBLISHED ARTICLES,OR−PREVALENT PRACTICES THAT EVOLVED AMONG GOVERNMENTS WITHOUTSPECIFIC AUTHORITATIVE ACTION.

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Chapter 01-Introduction to Accounting and Financial Reporting for Governmental and Not-for-ProfitOrganizations1-51-6.A.CONCEPTUALLY,THE MEASUREMENT FOCUS DETERMINESWHATIS MEASURED;THEBASIS OF ACCOUNTING DETERMINESWHENSOMETHING IS MEASURED.THE ECONOMICRESOURCES MEASUREMENT FOCUS MEASURES ALL ECONOMIC RESOURCES,INCLUDINGCAPITALASSETS AND LONG-TERM DEBT.THE CURRENT FINANCIAL RESOURCESMEASUREMENT FOCUS MEASURES PRIMARILY FINANCIAL RESOURCES AND DOES NOTRECOGNIZELONG-TERM ASSETS AND LIABILITIES.THESE RESOURCES ARE GENERALLYRESTRICTED TO CURRENT ASSETS,INVESTMENTS,AND SHORT-TERM LIABILITIESTHE ACCRUAL BASIS OF ACCOUNTING RECOGNIZES REVENUES WHEN EARNED ANDEXPENSES WHEN INCURRED.THE MODIFIED ACCRUAL BASIS OF ACCOUNTING ISSOMEWHERE BETWEEN THE CASH AND ACCRUAL BASES OF ACCOUNTING ANDRECOGNIZES REVENUES WHEN MEASURABLE AND AVAILABLE TO FINANCEEXPENDITURES OF THE CURRENT PERIOD.THE MODIFIED ACCRUAL BASIS OFACCOUNTING RECOGNIZES EXPENDITURES GENERALLY WHENTHE FUND LIABILITY ISINCURRED(I.E.GOODS AND SERVICES ARE RECEIVED).B.UNDER ACCRUAL ACCOUNTING REVENUES BASED ON EXCHANGE TRANSACTIONS ARERECOGNIZED WHEN EARNED.UNDER MODIFIED ACCRUAL ACCOUNTING,REVENUERECOGNITION IS MODIFIED TO REQUIRE THAT THE AMOUNT BE MEASURABLE ANDAVAILABLE TO FINANCE EXPENDITURES OF THE CURRENT PERIOD.C.UNDER ACCRUAL ACCOUNTING,EXPENSES ARE RECOGNIZED WHENGOODS OR SERVICESARE USED.EXPENSES ARE OFTEN MATCHED WITH THE REVENUES THOSE EXPENSESGENERATE,IN THE CASE OF EXCHANGE TRANSACTIONS.ACCRUALS ARE REQUIRED FORINTEREST AND OTHER EXPENSES,REGARDLESS OF WHEN CASH IS TO BE TRANSFERRED.UNDER MODIFIED ACCRUAL ACCOUNTING,EXPENDITURES(NOT EXPENSES)ARERECORDED GENERALLY WHEN GOODS OR SERVICES ARE RECEIVED.(TO THEINSTRUCTOR:THIS ANSWER IS BASED ON THE INFORMATION GIVEN INCHAPTER1;MORESOPHISTICATION IS INTRODUCED IN LATER CHAPTERS.)D.UNDER THE ECONOMIC RESOURCES MEASUREMENT FOCUS AND ACCRUAL ACCOUNTING,FIXED ASSETS ARE CAPITALIZED AND DEPRECIATED(EXCEPT FOR INFRASTRUCTUREASSETS USING THE MODIFIED APPROACH).UNDER THE CURRENT FINANCIAL RESOURCESMEASUREMENT FOCUS AND MODIFIED ACCRUAL ACCOUNTING,FIXED ASSETS ARE NOTCAPITALIZED OR DEPRECIATED;RATHER FIXED ASSETS ARE CHARGED TO EXPENDITURESWHEN RECEIVED.E.UNDER THE ECONOMIC RESOURCES MEASUREMENT FOCUS AND ACCRUAL ACCOUNTING,LONG-TERM DEBT IS RECORDED AS A LIABILITY.UNDER THE CURRENT FINANCIALRESOURCES MEASUREMENT FOCUS AND MODIFIED ACCRUAL ACCOUNTING,LONG-TERMDEBT IS NOT RECORDED AS A LIABILITY.(LATER CHAPTERS WILL INDICATE THAT THEISSUANCE OF DEBT RESULTS IN AN“OTHER FINANCING SOURCE”IN THEGOVERNMENTAL FUND STATEMENTS AND THAT THE REPAYMENT OF DEBT WILL RESULTIN AN EXPENDITURE IN THE GOVERNMENTAL FUND STATEMENTS.)

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Chapter 01-Introduction to Accounting and Financial Reporting for Governmental and Not-for-ProfitOrganizations1-61-7.PRIVATE SECTOR ORGANIZATIONS ARE ORGANIZATIONS THAT ARE NOT OWNED ORCONTROLLED BY GOVERNMENTS AND INCLUDE BUSINESSES AS WELL AS PRIVATE NOT-FOR-PROFIT ORGANIZATIONS.PUBLIC SECTOR ORGANIZATIONS ARE GOVERNMENTS ORORGANIZATIONS OWNED OR CONTROLLED BY GOVERNMENTS.1-8.ACCORDING TO THE WEB SITE,“THE MISSION OF THEGOVERNMENTALACCOUNTINGSTANDARDSBOARD IS TO ESTABLISH AND IMPROVE STANDARDS OF STATE ANDLOCALGOVERNMENTAL ACCOUNTING AND FINANCIAL REPORTING THAT WILL:*RESULT IN USEFUL INFORMATION FOR USERS OF FINANCIAL REPORTS AND*GUIDE AND EDUCATE THE PUBLIC,INCLUDING ISSUERS,AUDITORS,AND USERS OFTHOSE FINANCIAL REPORTS.”1-9.THEAPPROPRIATE FUNDSARE:a)CAPITAL PROJECTS FUND:THESE FINANCIAL RESOURCES ARE TO BE USED TOFINANCE CONSTRUCTION OF A CAPITAL ASSET.SINCE THE JAIL IS UNLIKELY TOCHARGE FOR ITS SERVICES,IT WOULD NOT BE PART OF A PROPRIETARY FUND.b)SPECIAL REVENUE FUND:SINCE THE TAX REVENUE IS RESTRICTED BY STATELAW FOR A PURPOSE OTHER THAN CAPITAL PROJECT OR DEBT SERVICE,THESEAMOUNTS WOULD BE REPORTED IN A SPECIAL REVENUE FUND.c)ENTERPRISE FUND:ALTHOUGH THIS REPRESENTS A CAPITAL PROJECT,WATERDEPARTMENTS ARE TYPICALLY REPORTED AS ENTERPRISE FUNDS.d)PRIVATE-PURPOSE TRUST FUND:THIS IS A TRUST FUND IN WHICH THE INCOMEBENEFITS INDIVIDUALS.IF THE PURPOSE OF THE FUND WAS TO BENEFIT THEGOVERNMENT OR ITS CITIZENRY(BROADLY),THEN IT WOULD BE APPROPRIATETO REPORT THESE RESOURCES IN A PERMANENT FUND.e)SPECIAL REVENUEFUND:ALTHOUGH THE LIBRARY BENEFITS THE CITIZENRY INGENERAL,THE ABSENCE OF A REQUIREMENT THAT PRINCIPAL BE MAINTAINEDPRECLUDES THE RESOURCES BEING REPORTED IN A PERMANENT FUND.SINCETHE RESOURCES ARE RESTRICTED BY THE DONOR,THEY WOULD BE REPORTED INA SPECIAL REVENUE FUND.f)GENERALFUND:THE RESOURCES ARE NEITHER FIDUCIARY NOR PROPRIETARY.SINCE THE RESOURCES ARE NOT RESTRICTED OR COMMITTED TO A PARTICULAR

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Chapter 01-Introduction to Accounting and Financial Reporting for Governmental and Not-for-ProfitOrganizations1-7PURPOSE,THEGENERALFUND WOULD BE THE APPROPRIATE FUND FORREPORTING THE PROCEEDS OF THE SALE OF THE EQUIPMENT.g)SEVERAL FUNDS WILL BE AFFECTED:–GENERALFUND–CONTRIBUTIONS ON BEHALF OF THE TEACHERS ANDPUBLICSAFETYEMPLOYEES WILL BE PAID BY THEGENERALFUND WHICH INCLUDESDEPARTMENTS WHERE THESE EMPLOYEES WORK.–ENTERPRISEFUND-WATER DEPARTMENTS ARE TYPICALLY REPORTED INENTERPRISE FUNDS ANDCONTRIBUTIONS ON BEHALF OFWATER DEPARTMENTEMPLOYEES WILL BE PAID BY THIS FUND.–PENSIONTRUSTFUND–THE AMOUNTS CONTRIBUTED BY THEGENERAL ANDENTERPRISE FUNDS WILL BE RECEIVED BY THE PENSION TRUST FUND FORINVESTMENT.

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Chapter 02-Overview of Financial Reporting for State and Local Governments2-1CHAPTER2Overview of Financial Reporting for State and Local Governments2-1.THE SOLUTION TO THIS AND THE FIRST EXERCISE OFCHAPTERS1AND3THROUGH9WILL DIFFER FROM STUDENT TO STUDENT ASSUMING EACH HAS A DIFFERENTCAFR.2-2.A.AFINANCIALREPORTING ENTITYISTHE PRIMARY GOVERNMENTTOGETHER WITH ITS COMPONENT UNITS.COMPONENT UNITS AREORGANIZATIONS FOR WHICH THE PRIMARY GOVERNMENT IS FINANCIALLYACCOUNTABLE,AND OTHER ORGANIZATIONS FOR WHICH THE NATURE ANDSIGNIFICANCE OF THEIR RELATIONSHIP WITH THE PRIMARY GOVERNMENTARE SUCH THAT EXCLUSION WOULD CAUSE THE REPORTING ENTITY'SFINANCIAL STATEMENTS TO BE MISLEADING OR INCOMPLETE.B.APRIMARY GOVERNMENTIS A STATE GOVERNMENT,GENERAL PURPOSELOCAL GOVERNMENT,OR SPECIAL PURPOSE GOVERNMENT.AN EXAMPLE OFA PRIMARY GOVERNMENT WOULD BE ANY STATE,MUNICIPALITY,ORCOUNTY(GENERAL PURPOSE GOVERNMENTS)AND ANY SPECIAL-PURPOSEGOVERNMENT THAT MEETS THE CERTAIN CRITERIA.C.ACOMPONENT UNITIS A LEGALLY SEPARATE ORGANIZATION FOR WHICHTHE ELECTED OFFICIALS OF THE PRIMARY GOVERNMENT ARE FINANCIALLYACCOUNTABLE.IN ADDITION,A COMPONENT UNIT CAN BE ANOTHERORGANIZATION FOR WHICH THE NATURE AND SIGNIFICANCE OF ITSRELATIONSHIP WITH A PRIMARY GOVERNMENT ARE SUCH THAT EXCLUSIONWOULD CAUSE THE REPORTING ENTITY'S FINANCIAL STATEMENTS TO BEMISLEADING OR INCOMPLETE.D.THE TWO PRIMARY METHODS FOR REPORTING COMPONENT UNITS IN THEFINANCIAL STATEMENTS OF A PRIMARY GOVERNMENT AREBLENDINGANDDISCRETEPRESENTATION.BLENDING REPORTS THE COMPONENT UNIT ASONE OF THE FUNDS OF THE PRIMARY GOVERNMENT,WHICH THEN RESULTS ININCLUDING THE COMPONENT UNIT AS PART OF THE BASIC FINANCIALSTATEMENTS.BLENDING IS USED WHEN COMPONENT UNITS ARESUFFICIENTLY INTERTWINED WITH THE PRIMARY GOVERNMENT THAT THEYARE,IN SUBSTANCE,THE SAME AS THE PRIMARY GOVERNMENT.BLENDINGIS ALSO USED IF THE COMPONENT UNIT PROVIDES SERVICES SOLELY TO THEPRIMARY GOVERNMENT OR IF THE COMPONENT UNIT’S DEBTS ARE EXPECTEDTO BE PAID BY THE PRIMARY GOVERNMENT.DISCRETE PRESENTATION INVOLVES REPORTING THE COMPONENT UNIT IN ACOLUMN TO THE RIGHTOF THE PRIMARY GOVERNMENT IN THEGOVERNMENT-WIDE FINANCIAL STATEMENTS OF THE REPORTING ENTITY.

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Chapter 02-Overview of Financial Reporting for State and Local Governments2-22-3.A.THE THREE MAJOR SECTIONS OF THECOMPREHENSIVEANNUALFINANCIALREPORTARE THEINTRODUCTORY,FINANCIAL,ANDSTATISTICALSECTIONS.B.THEGOVERNMENT-WIDEFINANCIALSTATEMENTSARE THESTATEMENT OFNETPOSITIONAND THESTATEMENT OFACTIVITIES.GOVERNMENT-WIDESTATEMENTSARE PRESENTED USING THE ECONOMIC RESOURCES MEASUREMENT FOCUS AND THEACCRUAL BASIS OF ACCOUNTING.C.THEGOVERNMENTALFUNDSTATEMENTSARE THEBALANCESHEET AND THESTATEMENT OFREVENUES,EXPENDITURES,ANDCHANGES INFUNDBALANCES.GOVERNMENTALFUNDSTATEMENTS ARE PRESENTED USING THE CURRENTFINANCIAL RESOURCES MEASUREMENT FOCUS AND MODIFIED ACCRUAL BASIS OFACCOUNTING.D.THEPROPRIETARYFUNDSTATEMENTSARE THESTATEMENT OFNET POSITION(ORBALANCESHEET),STATEMENT OFREVENUES,EXPENSES,ANDCHANGES INFUNDNET POSITION,AND THESTATEMENT OFCASHFLOWS.THEPROPRIETARYFUNDSTATEMENTS ARE PREPARED USING THE ECONOMICRESOURCESMEASUREMENT FOCUS AND THE ACCRUAL BASIS OF ACCOUNTING.E.THEFIDUCIARYFUNDSTATEMENTSARE THESTATEMENT OFFIDUCIARYNETPOSITIONAND THESTATEMENT OFCHANGES INFIDUCIARYNET POSITION.FIDUCIARYFUNDSTATEMENTS ARE PREPARED USING THE ECONOMIC RESOURCESMEASUREMENT FOCUS AND THE ACCRUAL BASIS OF ACCOUNTING.F.MANAGEMENT'SDISCUSSION ANDANALYSIS(MD&A)IS CONSIDERED TO BEREQUIREDSUPPLEMENTARYINFORMATION(RSI)AND IS PRESENTED IN THEFINANCIAL SECTION AFTER THE AUDITOR'S REPORT.THE REMAINDER OFRSIISGENERALLY PRESENTED AFTER THE NOTES TO THE FINANCIAL STATEMENTS ANDINCLUDES(A)BUDGETARY COMPARISON SCHEDULES,(B)INFORMATIONREGARDING INFRASTRUCTURE ASSETS WHEN USING THE MODIFIED APPROACH(C)SCHEDULES REQUIRED FOR DEFINEDBENEFITPENSION PLANS,AND(D)INFORMATION REQUIRED FOR EXTERNAL FINANCING POOLS.

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Chapter 02-Overview of Financial Reporting for State and Local Governments2-32.4THEGENERALFUND IS ALWAYS CONSIDERED A MAJOR FUND.OTHERGOVERNMENTAL FUNDS ARE CONSIDERED MAJOR WHEN BOTH OF THE FOLLOWINGCONDITIONS EXIST:(A)TOTAL ASSETS,LIABILITIES,REVENUES,OREXPENDITURESOF THAT INDIVIDUAL GOVERNMENTAL FUND CONSTITUTE10PERCENT OF THETOTAL FOR THE GOVERNMENTAL FUNDS CATEGORY,AND(B)TOTAL ASSETS,LIABILITIES,REVENUES,OREXPENDITURES OF THAT INDIVIDUAL GOVERNMENTALOR ENTERPRISE FUND ARE5PERCENT OF THE TOTAL OF THE GOVERNMENTAL ANDENTERPRISE CATEGORIES,COMBINED.ADDITIONALLY,A GOVERNMENT MAYDESIGNATE ANY FUND MAJOR IF REPORTING THAT FUND SEPARATELY WOULD BEUSEFUL.WHEN APPLYING THESE RULES,DEFERRED OUTFLOWS OF RESOURCES AREINCLUDED WITH ASSETS AND DEFERRED INFLOWS ARE INCLUDED WITH LIABILITIES.AN ENTERPRISE FUND IS CONSIDERED MAJOR IF:(A)ASSETS,LIABILITIES,REVENUES,OREXPENSES ARE10PERCENT OR MORE OF THE TOTAL FOR ALLENTERPRISE FUNDS,AND(B)ITS ASSETS,LIABILITIES,REVENUES,OREXPENSES ARE5PERCENT OR MORE OF THE TOTAL OF THE GOVERNMENTAL AND ENTERPRISECATEGORIES,COMBINED.WHEN APPLYING THESE RULES,DEFERRED OUTFLOWS OFRESOURCES ARE INCLUDED WITH ASSETS AND DEFERRED INFLOWS ARE INCLUDEDWITH LIABILITIES.•OPERATING ACTIVITIES ARE THOSE ASSOCIATED WITH OPERATING INCOME.AS A RESULT,CASH FLOWS FROM INTEREST EXPENSE,INTEREST REVENUEAND INVESTMENT INCOME DO NOT APPEAR IN THE OPERATING ACTIVITIESSECTION.2-5SEVERALDIFFERENCESEXISTBETWEENTHEGASBFORMATCASHFLOWSTATEMENT AND THEFASBFORMAT REQUIRED OF COMMERCIAL BUSINESSES:1)GASBREQUIRES GOVERNMENTS TO PREPARE CASH FLOWS FROM OPERATINGACTIVITIES ON THE DIRECT METHOD.2)THERECONCILIATIONOFINCOMETOCASHFLOWSFROMOPERATINGACTIVITIES OF THE PROPRIETARY FUND,WHICH APPEARS IN THE BOTTOMSECTION OF THE STATEMENT,BEGINS WITH OPERATING INCOME,NOT NETINCOME(OR TOTAL CHANGE INNET POSITION).3)THE STATEMENT HAS FOUR SECTIONS,RATHER THAN THE THREE OBSERVEDINFASBFORMAT STATEMENTS.THESE INCLUDE:•NONCAPITALRELATEDFINANCING ACTIVITIESINVOLVETHEBORROWINGAND PAYMENT(INCLUDING INTEREST)OF LOANS FOR PURPOSES OTHER THANFINANCING CAPITAL ADDITIONS–CHIEFLY,BORROWING FOR OPERATIONS.•CAPITALANDRELATEDFINANCINGINCLUDEGRANTSANDDEBTTRANSACTIONS(INCLUDINGINTEREST)USEDTOFINANCECAPITALADDITIONS.•INVESTINGACTIVITIESINVOLVETHEACQUISITIONANDSALEOFINVESTMENTS AS WELL AS CASH RECEIVED FROM INVESTMENT INCOME.

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Chapter 02-Overview of Financial Reporting for State and Local Governments2-42-6.THE DIFFERENCE BETWEEN ASSETS AND LIABILITIES IS CALLEDNET POSITIONAND ISREPORTED IN THREE CATEGORIES:▪NET INVESTMENT IN CAPITAL ASSETSIS COMPUTED BY TAKING THE CAPITALASSETS,LESS ACCUMULATED DEPRECIATION,AND DEDUCTING OUTSTANDING DEBTTHAT IS RELATED TO THE FINANCING OF CAPITAL ASSETS.LIABILITIES INCURREDTO FINANCE OPERATIONS(INCLUDING LONG-TERM LIABILITIES FOR COMPENSATEDABSENCES OR EMPLOYEE BENEFITS)WOULD NOT BE DEDUCTED.▪RESTRICTEDNET POSITIONINCLUDE RESOURCES THAT ARE RESTRICTED BY:(A)EXTERNAL PARTIES,INCLUDING CREDITORS,GRANTORS,CONTRIBUTORS,OR BYLAWSORREGULATIONSOFOTHERGOVERNMENTS,OR(2)LAWSORCONSTITUTIONAL PROVISIONS OF THE REPORTING GOVERNMENT.▪THE REMAINING AMOUNT,UNRESTRICTEDNET POSITION,IS A“PLUG”FIGURETHATISDETERMINEDBYDEDUCTINGTHEBALANCESOFTHEOTHERTWOCATEGORIES FROM THE OVERALL EXCESS OF ASSETS OVER LIABILITIES.

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Chapter 02-Overview of Financial Reporting for State and Local Governments2-52-7.CITYOFSOUTHERNSPRINGSSTATEMENTOFNETPOSITIONAS OFAPRIL30,2020GOVERNMENTALACTIVITIESBUSINESS-TYPEACTIVITIESTOTALASSETS:CASH ANDCASHEQUIVALENTSRECEIVABLESINVENTORIESCAPITALASSETS,NETTOTALASSETS$4,050,000650,00010,600,00015,300,000$880,0001,130,000520,00011,350,00013,880,000$4,930,0001,780,000520,00021,950,00029,180,000LIABILITIES:ACCOUNTSPAYABLENONCURRENTLIABILITIESTOTALLIABILITIES550,0005,550,0006,100,000659,0003,210,0003,869,0001,209,0008,760,0009,969,000NET POSITION:NET INVESTMENT IN CAPITALASSETSRESTRICTED FORDEBTSERVICEUNRESTRICTEDTOTALNET POSITION5,050,000754,0003,396,000$9,200,0008,140,000223,0001,648,000$10,011,00013,190,000977,0005,044,000$19,211,000

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Chapter 02-Overview of Financial Reporting for State and Local Governments2-62-8.CITYOFNORTHERNPINESSTATEMENTOFACTIVITIESFORTHEYEARENDEDJUNE30,2020PROGRAMREVENUESNET(EXPENSE)REVENUE ANDCHANGE INNET POSITIONFUNCTIONS/PROGRAMSEXPENSESCHARGES FORSERVICESOPERATINGGRANTSGOVERNMENTALACTIVITIESBUSINESS-TYPEACTIVITIESTOTALGOVERNMENTALACTIVITIES:GENERALGOVERNMENTPUBLICSAFETYPUBLICWORKSHEALTH ANDSANITATIONCULTURE ANDRECREATIONINTEREST ONLONG-TERMDEBTTOTALGOVERNMENTALACTIVITIES$10,000,00023,000,00011,890,0006,210,0004,198,0001,021,00056,319,000$1,110,0001,410,0002,355,0002,198,000________7,073,000$698,0001,210,000________1,908,000$(8,890,000)(20,892,000)(11,890,000)(2,645,000)(2,000,000)(1,021,000)(47,338,000)$$(8,890,000)(20,892,000)(11,890,000)(2,645,000)(2,000,000)(1,021,000)(47,338,000)BUSINESS-TYPEACTIVITIES:WATER ANDSEWERSYSTEMPARKINGSYSTEMTOTALBUSINESS-TYPEACTIVITIES11,550,000419,00011,969,00012,678,000298,00012,976,000------------------------1,128,000(121,000)1,007,0001,128,000(121,000)1,007,000TOTAL–PRIMARY GOVERNMENT$68,288,000$20,049,000$1,908,000(47,338,000)1,007,000(46,331,000)GENERALREVENUES:PROPERTYTAXESSALESTAXESINVESTMENTEARNINGSSPECIALITEM-GAIN ONSALE OFLANDTRANSFERSTOTALGENERALREVENUES,SPECIALITEMS,ANDTRANSFERSCHANGE INNET POSITIONNET POSITION,BEGINNING OF YEARNET POSITION,END OFYEAR27,112,00020,698,0001,250,000(888,000)48,172,000834,00012,222,000$13,056,000319,000888,0001,207,0002,214,00022,333,000$24,547,00027,112,00020,698,000319,0001,250,000-49,379,0003,048,00034,555,000$37,603,000

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Chapter 02-Overview of Financial Reporting for State and Local Governments2-72-9CITYOFEASTERNSHORESGENERALFUNDSTATEMENTSOFREVENUES,EXPENDITURES,ANDCHANGESINFUNDBALANCEFORTHEYEARENDEDSEPTEMBER30,2020REVENUES:PROPERTYTAXES$27,520,000SALESTAXES13,816,000FEES ANDFINES1,324,000LICENSES ANDPERMITS1,721,000INTERGOVERNMENTALREVENUES2,368,000INVESTMENTEARNINGS654,000TOTALREVENUES47,403,000EXPENDITURES:CURRENT:GENERALGOVERNMENT$11,725,000PUBLICSAFETY24,444,000PUBLICWORKS6,211,000HEALTH ANDSANITATION1,163,000CULTURE ANDRECREATION2,154,000TOTALEXPENDITURES45,697,000EXCESS OFREVENUESOVEREXPENDITURES1,706,000OTHERFINANCINGSOURCES(USES):TRANSFER TOCAPITALPROJECTFUND(1,529,000)TOTALOTHERFINANCINGSOURCES(USES)(1,529,000)SPECIALITEM:PROCEEDSFROMSALE OFLAND821,000NETCHANGE INFUNDBALANCE998,000FUNDBALANCE,BEGINNING OFYEAR1,750,000FUNDBALANCE,END OFYEAR$2,748,000

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Chapter 02-Overview of Financial Reporting for State and Local Governments2-82-10.CITYOFWESTERNSANDSWATERANDSEWERFUNDSTATEMENTOFREVENUES,EXPENSES,ANDCHANGESINFUNDNETPOSITIONYEARENDEDDECEMBER31,2020OPERATINGREVENUES:CHARGES FORSERVICES$17,387,000OPERATINGEXPENSES:PERSONNELSERVICES$5,877,000CONTRACTUALSERVICES2,995,000UTILITIES888,000REPAIRS ANDMAINTENANCE1,992,000DEPRECIATION5,422,000TOTALOPERATINGEXPENSES17,174,000OPERATINGINCOME213,000NONOPERATINGREVENUES(EXPENSES):INTERESTREVENUESTATEAID29,000100,000INTERESTEXPENSE(104,000)TOTALNONOPERATINGREVENUES ANDEXPENSES25,000INCOME(LOSS)BEFORECONTRIBUTIONS ANDTRANSFERS238,000CAPITALCONTRIBUTIONS1,632,000TRANSFER TOGENERALFUND(365,000)CHANGE INNETPOSITION1,505,000NET POSITION,BEGINNING OF YEAR1,800,000NET POSITION,END OF YEAR$3,305,000

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Chapter 02-Overview of Financial Reporting for State and Local Governments2-92-11.#INFORMATIONITEMSTATEMENT$AMOUNTA.TOTAL CAPITAL OUTLAY FOR THECOURTHOUSE RENOVATIONSTATEMENT OFREVENUESEXPENDITURES&CHANGES INFUNDBALANCE–GOVERNMENTAL FUNDS$10,924,818B.TOTAL CASH PAID FOR CAPITAL ADDITIONSFOR THESOLID WASTE FUNDSTATEMENT OFCASHFLOWS-PROPRIETARYFUNDS$456,179C.INTEREST PAID(NOT EXPENSE)ONGENERAL LONG-TERM DEBTSTATEMENT OFREVENUESEXPENDITURES&CHANGES INFUNDBALANCE–GOVERNMENTAL FUNDS$924,818D.INTEREST PAID(NOT EXPENSE)ON WATERDEPARTMENT DEBTSTATEMENT OFCASHFLOWS-PROPRIETARYFUNDS$535,567E.CAPITAL ASSET(NET)FOR THEGOVERNMENT’S COMPONENT UNITSSTATEMENT OFNET POSITION(GOVERNMENT-WIDE)$11,170,900F.CONTRIBUTIONS RECEIVED FOR USE BY THEPRIVATE PURPOSE TRUSTSTATEMENT OFCHANGES INFIDUCIARYNET POSITION$100,000G.NONCURRENT LIABILITIES ASSOCIATEDWITHGOVERNMENTAL ACTIVITIES THATARE DUE IN MORE THAN ONE YEAR.STATEMENT OFNET POSITION(GOVERNMENT-WIDE)$39,834,882H.NONCASH CONTRIBUTIONS OF CAPITALASSETS FOR THEWATER DEPARTMENT.STATEMENT OFCASHFLOWS-PROPRIETARYFUNDSALSO,STATEMENT OFREVENUES,EXPENSES ANDCHANGES INFUNDNETPOSITION:PROPRIETARY FUNDS$3,085,9462-12.#INFORMATIONITEMSTATEMENTS$AMOUNTA.TOTAL FUND BALANCE OF THESPECIALREVENUEFUNDSTATEMENT OFREVENUESEXPENDITURES&CHANGESINFUNDBALANCE–GOVERNMENTAL FUNDSBALANCESHEET–GOVERNMENTALFUNDS$572,014B.NETPOSITIONAVAILABLE FOREMPLOYEE PENSIONSSTATEMENT OFCHANGES INFIDUCIARYNET POSITIONSTATEMENT OFFIDUCIARYNETPOSITION$10,983,590C.OPERATING INCOME FOR THEINTERNALSERVICEFUNDSSTATEMENT OFREVENUES,EXPENSES,ANDCHANGES INFUNDNET POSITION–PROPRIETARY FUNDSSTATEMENT OFCASHFLOWS-PROPRIETARYFUNDS$23,822D.NETPOSITIONOF THE PRIMARYGOVERNMENTSTATEMENT OFNETPOSITION(GOVERNMENT-WIDE)STATEMENT OFACTIVITIES(GOVERNMENT-WIDE)$86,285,455

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Chapter 03–Modified Accrual Accounting3-1`CHAPTER3:MODIFIEDACCRUALACCOUNTING:INCLUDING THEROLE OFFUNDBALANCES ANDBUDGETARYAUTHORITY3-1.THE SOLUTION TO THIS AND THE FIRST EXERCISE OFCHAPTERS1AND2AND4THROUGH9WILL DIFFER FROM STUDENT TO STUDENTASSUMING EACH HAS A DIFFERENTCAFR.3-2.THE BUDGET STABILIZATION FUND’S PURPOSE IS TOO VAGUE AND MUST BE REPORTED WITHUNASSIGNED FUND BALANCE.3-3.RAINY DAY FUNDS ARE CLASSIFIED AS COMMITTED ONLY IF THEY ARE CREATED BY ARESOLUTION OR ORDINANCE THAT IDENTIFIES THE SPECIFIC CIRCUMSTANCES UNDER WHICHTHE RESOURCES MAY BE EXPENDED.RAINY DAY AMOUNTS THAT ARE AVAILABLE“INEMERGENCIES”OR IN PERIODS OF“REVENUE SHORTFALLS”WOULD NOT BE CLASSIFIED ASCOMMITTED UNLESS THE EMERGENCY OR SHORTFALL CONDITION IS SPECIFIED AND OF AMAGNITUDE TO DISTINGUISH IT FROM EVENTS THAT OCCUR ROUTINELY.RAINY DAY FUNDS NOT MEETING THESE CONDITIONS ARE REPORTED AS UNASSIGNED FUNDBALANCE IN THEGENERALFUND.CITY OFOXBOWPARTIALBALANCESHEET–GENERALFUNDAS OFDECEMBER31,2020FUNDBALANCESNONSPENDABLE-PREPAIDINSURANCE7,000RESTRICTED-INTERGOVERNMENTAL GRANTS199,000-EMERGENCY SERVICES26,000COMMITTED-RAINY DAY FUND600,000-CAPITAL PROJECTS275,000ASSIGNED-UNASSIGNED452,000TOTALFUNDBALANCE$1,559,000

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Chapter 03–Modified Accrual Accounting3-23-4.DEBITSCREDITSA.ESTIMATEDREVENUESCONTROLAPPROPRIATIONSCONTROLBUDGETARYFUNDBALANCE10,800,0009,400,0001,400,000B.ESTIMATEDREVENUESCONTROLBUDGETARYFUNDBALANCEAPPROPRIATIONSCONTROL9,700,000400,00010,100,000C.ESTIMATEDREVENUESCONTROLESTIMATEDOTHERFINANCINGSOURCESCONTROLAPPROPRIATIONSCONTROLESTIMATEDOTHERFINANCINGUSESCONTROLBUDGETARYFUNDBALANCE10,200,0001,300,0009,700,000900,000900,000D.ESTIMATEDREVENUESCONTROLESTIMATEDOTHERFINANCINGSOURCESCONTROLBUDGETARYFUNDBALANCEAPPROPRIATIONSCONTROLESTIMATEDOTHERFINANCINGUSESCONTROL9,900,0001,100,000100,00010,000,0001,100,000

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Chapter 03–Modified Accrual Accounting3-33-5.VILLAGEOFSYCAMOREGENERALJOURNALDEBITSCREDITSA.ESTIMATEDREVENUESCONTROLAPPROPRIATIONSCONTROLBUDGETARYFUNDBALANCE1,120,000987,000133,000B.CASHREVENUESCONTROL1,105,0001,105,000C.ENCUMBRANCESCONTROLBUDGETARYFUNDBALANCE-RESERVE FORENCUMBRANCES479,000479,000D.BUDGETARYFUNDBALANCE-RESERVE FORENCUMBRANCESENCUMBRANCESCONTROLEXPENDITURESCONTROLACCOUNTSPAYABLE470,500470,000470,500470,000E.EXPENDITURESCONTROLACCOUNTSPAYABLE513,000513,000F.ACCOUNTSPAYABLECASH983,000983,000

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Chapter 03–Modified Accrual Accounting3-43-6.A.(1)EXCHANGE TRANSACTIONSARE TRANSACTIONS“IN WHICH EACH PARTY RECEIVESAND GIVES UP ESSENTIALLY EQUAL VALUES.”(2)NONEXCHANGE TRANSACTIONSARETRANSACTIONS“IN WHICH A GOVERNMENTRECEIVES(OR GIVES)VALUE WITHOUTDIRECTLYGIVING(ORRECEIVING)EQUAL VALUE INEXCHANGE.”B.THE FOUR ELIGIBILITY REQUIREMENTS ARE(1)REQUIRED CHARACTERISTICS OF RECIPIENTS:REQUIRED CHARACTERISTICS OFRECIPIENTS MEANS THAT RECIPIENTS MUST BE THE TYPE SPECIFIED IN THE LEGISLATION ORGRANT AGREEMENTS.(2)TIME REQUIREMENTS:IF A DONOR SPECIFIES THAT A GRANT BE EXPENDED BY ARECIPIENT IN A FUTURE PERIOD,THEN THE RECIPIENT WOULD NOT RECOGNIZE THERECEIVABLE OR THE REVENUE UNTIL THAT FUTURE PERIOD(3)REIMBURSEMENTS:REIMBURSEMENT GRANTS REQUIRE THAT QUALIFYINGEXPENDITURES MUST BE INCURRED BY A RECIPIENT BEFORE A REVENUE CAN BERECOGNIZED.(4)CONTINGENCIES:RESOURCES PLEDGED THAT HAVE A CONTINGENCY ATTACHED ARENOT TO BE RECOGNIZED UNTIL THE CONTINGENCY HAS BEEN MET.C.THE FOUR CLASSES OF NONEXCHANGE REVENUES ARE(1)IMPOSED NONEXCHANGETRANSACTIONS,(2)DERIVED TAX REVENUES,(3)GOVERNMENT-MANDATED NONEXCHANGETRANSACTIONS,AND(4)VOLUNTARY NONEXCHANGE TRANSACTIONS.AN EXAMPLE OFIMPOSED NONEXCHANGE REVENUESWOULD BE PROPERTY TAXES.ASSETS FROM PROPERTY TAXES ARE RECOGNIZED WHEN AN ENFORCEABLE LEGAL CLAIMEXISTS.REVENUES WOULD BE RECOGNIZED IN THE PERIOD FOR WHICH THE TAXES ARELEVIED.EXAMPLES OFDERIVED TAX REVENUESINCLUDE SALES,INCOME,AND MOTOR FUEL TAXES.FOR DERIVED TAX REVENUES,ASSETS ARE RECOGNIZED WHEN THE TAX IS IMPOSED.THETAXIS RECOGNIZED AS REVENUE AT THE SAME TIME AS THE ASSET,PROVIDING THAT THEUNDERLYING TRANSACTION HAS TAKEN PLACE.AN EXAMPLE OFGOVERNMENT-MANDATED NONEXCHANGETRANSACTIONS WOULD BESTATE FUNDING FOR MAINSTREAMING HANDICAPPED CHILDREN IN CLASSROOMS,ACCOMPANIEDBY STATE LAW THAT MAINSTREAMING TAKE PLACE.ASSETS AND REVENUESSHOULD BE RECOGNIZED WHEN ELIGIBILITY REQUIREMENTS HAVE BEEN MET.AN EXAMPLEOF AVOLUNTARYNONEXCHANGE TRANSACTIONWOULD BE ACONTRIBUTION OR GRANTTO SUPPORT A PROGRAM THAT WAS VOLUNTARILY ENTERED INTO BY THE GOVERNMENT.NONEXCHANGE TRANSACTIONS SHOULD BE RECOGNIZED AS ASSETS AND REVENUES WHENELIGIBILITY REQUIREMENTS HAVE BEEN MET.

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Chapter 03–Modified Accrual Accounting3-53-7.A.UNDER MODIFIED ACCRUAL ACCOUNTING,REVENUES SHOULD BE RECOGNIZED WHENMEASURABLEAND AVAILABLE TO FINANCE EXPENDITURES OF THE CURRENT PERIOD.PROPERTY TAXES ARE CONSIDERED TO BE AVAILABLE WHEN RECEIVED NO MORE THAN60DAYS AFTER THE END OF A FISCAL YEAR.B.UNDER MODIFIED ACCRUAL ACCOUNTING,EXPENDITURES ARE DECREASES IN NETFINANCIAL RESOURCES AND ARE GENERALLY RECOGNIZED WHEN FUND LIABILITIES AREINCURRED.EXPENDITURES MAY BE FOR CURRENT PURPOSES,CAPITAL OUTLAY,AND DEBTSERVICE.3-8.(1)GAAPBASISIS THE ACCOUNTING PRINCIPLES USED TO REPORT IN THEGENERALFUNDBALANCESHEET ANDSTATEMENT OFREVENUES,EXPENDITURES ANDCHANGES INFUNDBALANCE.IT IS THE RESULT OF APPLYINGGASBSTANDARDS FOR GOVERNMENTAL FUNDREPORTING.(2)BUDGETARYBASISIS THE BASIS USED TO REPORT THE“ACTUAL”COLUMNIN THE BUDGETARY COMPARISON SCHEDULE.THE ACTUAL COLUMN OF THE BUDGETARYCOMPARISON SCHEDULE IS TO BE REPORTED ON THE BASIS REQUIRED BY LAW FOR BUDGETPREPARATION,EVEN IF THAT BASIS DIFFERS FROMGASBSTANDARDS.TYPICALLYBUDGETARY BASIS DIFFERS FROM THEGAAPBASIS IN THE TIMING OF THE RECOGNITION OFREVENUES AND EXPENDITURES.

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Chapter 03–Modified Accrual Accounting3-63-9.CITYOFSOUTHRIVERAPPROPRIATION,EXPENDITURES,ANDENCUMBRANCESLEDGERGENERALFUND:PUBLICSAFETY–POLICEMONTH:JULY,2020UNEXPENDEDAPPROPRIATIONBALANCETRANSACTIONREFERENCEAPPROPRIATIONSENCUMBRANCESEXPENDITURES=SUM1BUDGET($8,900,000)($8,900,000)2PURCHASEORDERSISSUED$520,000($8,380,000)3INVOICES RECEIVEDAND APPROVED FORPAYMENT($480,000)$478,000($8,382,000)4PAYROLLS$302,000($8,080,000)5BUDGETREVISION$50,000($8,030,000)TOTAL($8,850,000)$40,000$780,000($8,030,000)$AMOUNTS IN()DENOTE CREDITS3-10.1.THECITY APPROVED A BUDGET PROVIDING APPROPRIATIONS TO THEPUBLICSAFETYDEPARTMENT IN THE AMOUNT OF$300,000.2.PURCHASE ORDERS TOTALING$19,500WERE PLACED AND ENCUMBRANCES RECORDED.3.INVOICES TOTALING$15,500ARE RECEIVED AND APPROVED FOR PAYMENT.THESE ITEMSWERE PREVIOUSLY ENCUMBERED IN THE AMOUNT OF$16,000.$3,500OF THE PURCHASEORDERS FROM#2ARE STILL OUTSTANDING.4.EXPENDITURES TOTALING$11,000ARE RECORDED.SINCE THESE AMOUNTS WERE NOTPREVIOUSLY ENCUMBERED,THEY ARE LIKELY SALARIES OR OTHER RECURRING ITEMS5.THE APPROPRIATIONS BUDGET IS REDUCED BY$18,000AS A RESULT OF A BUDGET REVISION.

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Chapter 03–Modified Accrual Accounting3-73-11(A)CITY OFVIENNABUDGETARYCOMPARISONSCHEDULEGENERALFUNDFOR THEYEARENDEDDEC.31,2020ACTUALAMOUNTSVARIANCEBudgeted(Budgetarywith FinalOriginalFinalBasis)BudgetRevenues:Taxes6,500,0006,465,0006,480,00015,000Licenses230,000230,000225,000(5,000)Intergovernmental1,200,0001,200,0001,200,0000Miscellaneous120,000104,000106,0002,000Total Revenues8,050,0007,999,0008,011,00012,000Expenditures and EncumbrancesGeneral Government2,700,0002,602,0002,503,50098,500Public Safety4,050,0004,200,0004,215,000(15,000)Health and Welfare1,230,0001,220,0001,198,00022,000Total Expenditures andEncumbrances.7,980,0008,022,0007,916,500105,500Net Change in Fund Balance70,000(23,000)94,500117,500Fund Balance–Beginning350,000350,000350,0000Fund Balance-Ending420,000327,000444,500117,5003-11(B)GENERALLEDGERSUBSIDIARYLEDGERDEBITSCREDITSDEBITSCREDITSBUDGETARYFUNDBALANCEESTIMATEDREVENUESCONTROLAPPROPRIATIONSCONTROL93,00051,00042,000REVENUESLEDGER:TAXREVENUESMISCELLANEOUSREVENUESAPPROPRIATIONSLEDGER:GENERALGOVERNMENTHEALTH ANDWELFAREPUBLICSAFETY98,00010,00035,00016,000150,000

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Chapter 03–Modified Accrual Accounting3-83-12(A).CITYOFSPRINGFIELDGENERALFUND-GENERALJOURNALYEARENDEDDECEMBER31,2020GENERALLEDGERSUBSIDIARYLEDGERDEBITSCREDITSDEBITSCREDITS1.ESTIMATEDREVENUESCONTROLBUDGETARYFUNDBALANCE12,471,00012,471,000ESTIMATEDREVENUESLEDGER:PROPERTYTAXESSALESTAXESLICENSES AND PERMITSMISCELLANEOUSREVENUES5,641,0004,830,0001,500,000500,0002.BUDGETARYFUNDBALANCEAPPROPRIATIONSCONTROL10,495,00010,495,000APPROPRIATIONSLEDGER:GENERALGOVERNMENTCULTURE ANDRECREATIONHEALTH ANDWELFARE5,285,0004,210,0001,000,0003.CASHREVENUESCONTROL12,745,00012,745,000REVENUESLEDGER:PROPERTYTAXESSALESTAXESLICENSES AND PERMITSMISCELLANEOUSREVENUES5,545,0004,700,0001,700,000800,0004.ENCUMBRANCESCONTROLBUDGETARYFUNDBALANCE-RESERVE FOR ENCUMBRANCES10,810,00010,810,000ENCUMBRANCESLEDGER:GENERALGOVERNMENTCULTURE ANDRECREATIONHEALTH ANDWELFARE5,275,0004,630,000905,000

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Chapter 03–Modified Accrual Accounting3-93-12(A)(CONTINUED)GENERALLEDGERSUBSIDIARYLEDGERDEBITSCREDITSDEBITSCREDITS5A.BUDGETARYFUNDBALANCE-RESERVE FORENCUMBRANCESENCUMBRANCESCONTROL10,810,00010,810,000ENCUMBRANCESLEDGER:GENERALGOVERNMENTCULTURE ANDRECREATIONHEALTH ANDWELFARE5,275,0004,630,000905,0005B.EXPENDITURESCONTROLCASH10,785,00010,785,000EXPENDITURESLEDGER:GENERALGOVERNMENTCULTURE ANDRECREATIONHEALTH ANDWELFARE5,285,0004,610,000890,0006.BUDGETARYFUNDBALANCEAPPROPRIATIONSCONTROL250,000250,000APPROPRIATIONSLEDGER:GENERALGOVERNMENTCULTURE ANDRECREATION140,000110,000

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Chapter 03–Modified Accrual Accounting3-103-12(B)CITY OF SPRINGFIELDBUDGETARYCOMPARISON SCHEDULEGENERAL FUNDYEAR ENDED DECEMBER 31,2020BUDGETEDAMOUNTSACTUALAMOUNTS(BUDGETARYBASIS)VARIANCEWITHFINALBUDGETPOSITIVE(NEGATIVE)ORIGINALFINALREVENUES:PROPERTYTAXESSALESTAXESLICENSES ANDPERMITSMISCELLANEOUSTOTALREVENUES$5,641,0004,830,0001,500,000500,00012,471,000$5,641,0004,830,0001,500,000500,00012,471,000$5,545,0004,700,0001,700,000800,00012,745,000(96,000)(130,000)200,000300,000274,000EXPENDITURES ANDENCUMBRANCES:GENERALGOVERNMENTCULTURE ANDRECREATIONHEALTH ANDWELFARETOTALEXPENDITURES ANDENCUMBRANCES5,285,0004,210,0001,000,00010,495,0005,425,0004,320,0001,000,00010,745,0005,285,0004,610,000890,00010,785,000140,000(290,000)110,000(40,000)EXCESS(DEFICIENCY)OFREVENUESOVEREXPENDITURES ANDENCUMBRANCESFUNDBALANCE,BEGINNINGFUNDBALANCE,ENDING1,976,000753,000$2,729,0001,726,000753,000$2,479,0001,960,000753,000$2,713,000234,000---$234,000

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Chapter 03–Modified Accrual Accounting3-113-13TOWN OF RIVERSIDEBUDGETARY COMPARISON SCHEDULEGENERAL FUNDYEAR ENDED DECEMBER 31,2020BUDGETEDAMOUNTSACTUALAMOUNTS(BUDGETARYBASIS)VARIANCEWITHFINALBUDGETPOSITIVE(NEGATIVE)ORIGINALFINALREVENUES:PROPERTYTAXESBUSINESSLICENSESTOTALREVENUES$685,000165,000850,000$685,000135,000820,000$687,500124,000811,500$2,500(11,000)8,500EXPENDITURES ANDENCUMBRANCES:GENERALGOVERNMENTPARKS ANDRECREATIONSANITATIONSTREETS ANDSIDEWALKSTOTALEXPENDITURES ANDENCUMBRANCES395,000110,00090,000160,000755,000395,000160,00090,000160,000805,000365,000160,50091,600157,333774,43330,000(500)(1,600)2,66730,567EXCESS(DEFICIENCY)OFREVENUESOVEREXPENDITURES ANDENCUMBRANCESFUNDBALANCE,BEGINNINGFUNDBALANCE,ENDING95,00049,000$144,00015,00049,000$64,00037,06749,000$86,06722,067---$22,067

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Chapter 03–Modified Accrual Accounting3-123-14.SOLUTIONS TO THEEXCEL BASED EXERCISES ARE ALSO AVAILABLE INEXCEL ON THEINSTRUCTOR’S WEBSITESchedule of Revenues, Expenditures and Changes in Fund Balance-Budget and Actual:General FundFor The Year Ended December 31, 2020Budgeted AmountsREVENUESOriginalFinalActualAmountsBudgetaryBasisVariance withFinal BudgetProperty Taxes14,677,00014,677,00015,361,830684,830Other Local Taxes11,562,50011,562,50011,761,522199,022Charges for Services1,613,0111,613,0111,601,435(11,576)Intergovernmental7,892,0808,047,9077,098,698(949,209)Miscellaneous1,504,9771,388,3851,262,549(125,836)TOTAL REVENUES37,249,56837,288,80337,086,034(202,769)EXPENDITURESCurrentGeneral Government3,567,8383,489,8703,453,50236,368Judicial Administration1,351,0001,497,8451,456,73441,111Public Safety7,753,0028,325,5648,216,347109,217Public Works4,541,6514,984,3534,602,273382,080Health and Welfare4,823,2674,440,1674,418,29421,873Education8,963,2488,929,7258,887,83441,891Parks and Recreation2,983,8613,097,5283,055,32542,203Community Development872,594904,168899,2094,959TOTAL EXPENDITURES34,856,46135,669,22034,989,518679,702REVENUES OVER (UNDER) EXPENDITURES2,393,1071,619,5832,096,516476,933OTHER FINANCING SOURCES (USES):Transfers (to) other funds(3,560,000)(3,257,000)(3,256,899)101(3,560,000)(3,257,000)(3,256,899)101Excess of revenues and other sources over(under) expenditures and other uses(1,166,893)(1,637,417)(1,160,383)477,034FUND BALANCE-Beginning of Year12,338,96312,338,96312,338,963-FUND BALANCE-End of Year11,172,07010,701,54611,178,580477,034The shaded information below isprovided in the student exceltemplate. Solution journalentries appear on the next page.

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Chapter 03–Modified Accrual Accounting3-133-14General LedgerSubsidiaryLedgera. Record the original budgetDebitsCreditsDebitsCreditsRevenues control accountEstimated Revenues Control37,249,568Estimated Other Financing Uses Control-Budgetary Fund Balance37,249,568Estimated Revenues ledger:Property Taxes14,677,000Other Local Taxes11,562,500Charges for Services1,613,011Intergovernmental Revenue7,892,080Miscellaneous1,504,97737,249,568Appropriations control accountBudgetary Fund Balance38,416,461Appropriations Control34,856,461Estimated Other Financing Uses Control3,560,000Appropriationssubsidiaryledger:General Government3,567,838JuidicialAdministration1,351,000Public Safety7,753,002Public Works4,541,651Health and Welfare4,823,267Education8,963,248Parks and Recreation2,983,861Community Development872,59434,856,461Other Financing Usessubsidiaryledger:Transfers out3,560,000General LedgerSubsidiary Ledgerb.Record the budget revisionsDebitsCreditsDebitsCreditsEstimated Revenues Control39,235Estimated Other Financing UsesControl303,000Budgetary Fund Balance470,524Appropriations Control812,759Revenuessubsidiaryledger:Intergovernmental Revenues155,827Miscellaneous116,592Appropriationssubsidiaryledger:General Government77,968JudicialAdministration146,845Public Safety572,562Public Works442,702Health and Welfare383,100Education33,523Parks and Recreation113,667Community Development31,574Other Financing Usessubsidiaryledger:Transfers out303,000

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Chapter 03–Modified Accrual Accounting3-14General LedgerSubsidiary Ledgerc.Record the Actual RevenuesDebitsCreditsDebitsCreditsCash37,086,034Revenues Control37,086,034Revenuessubsidiaryledger:Property Taxes15,361,830Other Local Taxes11,761,522Charges for Services1,601,435Intergovernmental Revenue7,098,698Miscellaneous1,262,54937,086,034General LedgerSubsidiary Ledgerd.Record the encumbrancesDebitsCreditsDebitsCreditsEncumbrances Control34,989,518Budgetary Fund Balance-Reserve forEncumbrances34,989,518Encumbrancessubsidiaryledger:General Government3,453,502JuidicialAdministration1,456,734Public Safety8,216,347Public Works4,602,273Health and Welfare4,418,294Education8,887,834Parks and Recreation3,055,325Community Development899,20934,989,518General LedgerSubsidiary Ledgere. Record the actual expenditures andEncumbrance ReversalsDebitsCreditsDebitsCreditsBudgetary Fund Balance-Reserve forEncumbrances34,989,518Encumbrances Control34,989,518Encumbrancessubsidiaryledger:General Government3,453,502JudicialAdministration1,456,734Public Safety8,216,347Public Works4,602,273Health and Welfare4,418,294Education8,887,834Parks and Recreation3,055,325Community Development899,20934,989,518Expenditures Control34,989,518Accounts Payable34,989,518Expendituressubsidiaryledger:General Government3,453,502Judicial Administration1,456,734Public Safety8,216,347Public Works4,602,273Health and Welfare4,418,294

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