Week 4 Assignment 2 - Financial Reporting Review of Local Government
ACC410 Week 1 Homework Answers Submission Sheet Summer 2021
Name: Tammy Cooper
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Homework Due |
Points Possible |
Points Received |
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Exercise 1-2 |
4 |
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Problem 1-1 |
8 |
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Exercise 2-2 |
4 |
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Continuing |
8 |
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Problem 2-1 |
8 |
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Chapter 1:
Exercise 1-2 (Questions 1 through 10) textbook pages 28-29
(Enter the letters a, b, c, or d next to the question number)
1. b
2. b
3. d
4. b
5. a
6. c
7. a
8. b
9. a
10. b
Problem 1-1 textbook page 30
(Enter the answer to the question next to the letter (a, b, c, d) asking the question)
a. 7.4 million
b. 6.5 million
c. 16.5 million
d. Extent to which the authority’s budgeting and taxing policies promote interperiod equity –
The taxpayers will have to pay for the equipment in the 10th year for the services that the equipment provided during the previous 10 years.
Recommended changes –
I would recommend amortizing the bonds payable over 10 years. There would be less tax burden on current and future taxpayers for highway maintenance.
Chapter 2:
Exercise 2-2 (Questions 1 through 12) textbook pages 79-80
Enter the letters a, b, c, or d next to the question number)
1. a
2. c
3. d
4. d
5. d
6. a
7. a
8. b
9. c
10. c
11. a
12. d
Continuing Problem (Questions 1 through 4) textbook pages 82-83 – 2020 Town of Cary, NC CAFR is used for these questions found at https://www.townofcary.org/home/showpublisheddocument?id=25355
(Enter the answer to the question next to the question number and letter if present)
1. 1. Introductory Section
2. Financial Section
3. Statistical Section
2. a. Yes
Significance –
This indicates that the report met the CAFR’s standards.
b. Key issues addressed in letter of transmittal –
Legal requirements for the presentation of a CAFR, statement of fact that the CAFR is the responsibility of management, and the results of the audit.
3. a. _Cherry Bekaert___________________________________________________________________
b. Yes –
If no, why not? –
n/a
c. Management Discussion and Analysis – Yes –
If yes, key issues are –
d. Reconciliation between total governmental net position per government-wide statement of net position – and – total governmental fund balances per the governmental fund balance sheet –No –
If yes, what are the main reconciling items –
e. Major governmental funds maintained by the Town of Cary, NC in 2019 –
Capital Project Fund – consisting of street project fund, downtown project fund, parks, recreation and cultural resources project fund, general governmental project fund, and a general capital reserve fund.
Town of Cary’s fund structure conforms to its organizational structure – Yes
f. Report contains “required supplemental information” – Yes
If yes, main areas addressed –
Law enforcement officers’ special separation allowance, Local government employee retirement system, Other post-employment benefits
g. Report includes “combining statements” – Yes
If yes, nature of those statements –
Sub-fund breakdown of the information from the financial statements
h. Report contains “other supplemental information” – Yes
If yes, types of information provided –
Capital project fund – sub-fund combining balance sheet and combining schedule of revenues, expenditures, and changes in fund balance Street project sub-fund, downtown project sub-fund, parks, recreation and cultural projects sub-fund, fire project sub-fund, general government project sub-fund, general capital reserve sub-fund - combining schedule of revenues, expenditures, and changes in fund balance for each
4. a. Population –
b. Town of Cary’s major employer – SAS Institute, Inc.
c. Types of information included in statistical section –
financial trends, revenue capacity, debt capacity, demographic and economic, operating information
Problem 2-1 textbook page 83
a. Journal entries –
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Debit |
Credit |
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(1) |
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Cash |
100,000 |
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Grant Revenue |
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100,000 |
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(2) |
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Computer Expenditure |
10,000 |
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Cash |
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10,000 |
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(3) |
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Wage Expenditure |
6,000 |
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Cash |
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6,000 |
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(4) |
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Cash |
24,000 |
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Proceeds from Borrowing |
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24,000 |
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(5) |
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Automobile Expenditure |
24,000 |
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Cash |
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24,000 |
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(6) |
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Internet Expenditure |
200 |
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Cash |
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200 |
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(7) |
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No Journal Entry |
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b. Balance Sheet
General Fund
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Assets |
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Cash |
83,800 |
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Fund Balance |
83,800 |
Statement of Revenues, Expenditures, and Other Changes in Fund Balances
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Revenues |
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Grants |
100,000 |
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Expenditures |
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Acquisition of Computers |
10,000 |
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Acquisition of Automobile |
24,000 |
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Wages |
6,000 |
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Interest |
200 |
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Total Expenditures |
40,200 |
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Excess Revenue over Expenditures |
59,800 |
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Other Changes in Fund Balances |
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Proceeds from Borrowing |
24,000 |
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Addition to Fund Balances |
83,800 |
c. Statement of Net Position
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Assets |
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Cash |
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83,800 |
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Computers |
8,000 |
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Automobile |
24,000 |
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Capital Assets |
32,000 |
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Less Accumulated Depreciation |
6,400 |
25,600 |
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Total Assets |
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109,400 |
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Liabilities |
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Notes Payable |
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24,000 |
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Total Liabilities |
24,000 |
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Net Position |
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85,400 |
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Total Liabilities |
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109,400 |
Statement of Activities
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Expenses |
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Wages |
6,000 |
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Interest |
200 |
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Depreciation |
6,400 |
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Loss on Computer |
2,000 |
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Total Expenses |
14,600 |
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Revenues |
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Grants |
100,000 |
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Increase in Net Position |
85,400 |
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