The city of Richardson reported a change in fund balance of $2,002,000 in its governmental funds
statement of Revenue, Expenditures, and Changes in Fund Balances for the year ended December 31, 2004.
Additional information:
1. Capital outlay expenditures amounted to $10,000,0000 in the modified accrual statement. General government
fixed asset amounted to $160,000,000 excluding land and had an average life of 20 years.
2. The modified accrual statement reported proceeds from the sale of land in the amount of $1,000,000.
The land had a basis of $800,000.
3. Property taxes had been levied in the amount of $20,000,000. It was estimated that 3% would be
uncollected, that $1,000,000 would be collected within 60 days of year-end, and that $400,000
would be collected more than 60 days from year-end. the city had recognized the maximum permitted under modified
accrual accounting.
4. $370,000 of property taxes had been deferred at the end of the previous year and was recognized under modified
accrual as revenue in the current year.
5. The modified accrual statement reflected dedt service expenditures in the amount of $1,000,000
for interest and $1,500,000 for principal. No adjustment was necessary for interest accruals at year-end.
6.Compensated absences charges, on the full accrual basis, amounted to $100,000 more than
under the modified accrual basis.

The change in net assets in the governmental column in the governmenta-wide statement of activities for
the year ended December 31, 2004 are:

a 4,602,000
b 5,202,000
c 3,832,000
d 4,632,000

correct anwser: d

Can anybody help me with addtional info No.3 and No.4 calculations?

I think it should be +400,000-370,000=30,000 based on the anwer key provided by becker, but why we need to subtract 370,000 here? Compare to the last question I asked, "the $370,000 of property taxes had been deferred at the end of the previous year and was recognized under modified" should this be subtracted or not on earth?

I think that the diff between Q's is the term receivables. In this Q it is not used so maybe this is the reason we account the same transaction differently..I don't know. I'm as confused just as you are.

Yes, here we are comparing "income statements" b/w governmental fund and govt wide.

In the previous question, we were comparing "balance sheet" and the effect of IS went into the BS and thus, net effect was zero when both B/S were reconciled.

But, here.... it is only IS.. So, we would proceed in the following manner :-

Change in Fund Balance in govt fund balance	2,002,000
Add.
Capital outlay expenditures	10,000,000
Gain on sale of land	200,000
(1,000,000-800,000)
Property taxes levied beyond 60 days	400,000
Principal paid - " debt service exp"	1,500,000
Less.
Depreciation on general govt Fixed assets	-8,000,000
(160,000,000/20 yrs)
Proceeds from sale of land	-1,000,000
Addl compensated charges on full accrual basis	-100,000
Property taxes already recognized in govt wide F/S
as receivable under full accrual basis last year	-370,000
Change in net assets in governmental column	4,632,000
in govt wide statement of activities Hope that helps !

Divya,

I am still having problems to reconcile governmental funds and Government wide...is there an all inclusive formula?? or an easier way to understand this...

The City of Bending Willows, a general purpose government, reported fund balances in the amount of $48,200,000 in the governmental funds balance sheet dated December 31, 2004.  Additional information:

1.    General government fixed assts amounted to $70,000,000.  Accumulated depreciation of those fixed assets amounted to $36,000,000.

2.    General long-term liabilities of the government amounted to $12,000,000.

3.    Property taxes, which should be recognized as receivables in the government-wide statements, amount to $6,000,000.  Property taxes recognized as receivables in the governmental funds balance sheet amounted to $4,000,000; the remainder had been deferred, in accord with modified accrual accounting.  Additionally, $1,800,000 of property taxes had been deferred at the end of the previous year (2003) and was recognized under modified accrual as revenue in the current year.

4.    Internal service funds net assets amounted to $10,000,000.  These were reported in the proprietary funds balance sheet.

5.    Liabilities, in addition to the amount reported in the governmental funds balance sheet, included: (1) accrued interest payable, $600,000; (2) compensated absences payable, $9,000,000.

The net assets recognized in the governmental funds column of the government-wide Statement of Net Assets are:

Answer: 72,600,000