Business, 25.11.2021 14:00, ghwolf4p0m7x0

The City of Pfeiffer starts the year of 2020 with the general fund and an enterprise fund. The general fund has two activities: education and parks/recreation. For convenience, assume that the general fund holds $106,000 cash and a new school building costing $1,010,000. The city utilizes straight-line depreciation. The building has a 20-year life and no residual value. The enterprise fund has $78,400 cash and a new $510,000 civic auditorium with a 30-year life and no residual value. The enterprise fund monitors one activity, the rental of the civic auditorium for entertainment and other cultural affairs. The following transactions for the city take place during 2017. Assume that the city’s fiscal year ends on December 31.

a. Decides to build a municipal park and transfers $70,000 into a capital projects fund and immediately expends $20,000 for a piece of land. The creation of this fund and this transfer were made by the highest level of government authority.
b. Borrows $110,000 cash on a long-term bond for use in creating the new municipal park.
c. Assesses property taxes on the first day of the year. The assessment, which is immediately enforceable, totals $600,000. Of this amount, $510,000 will be collected during 2020 and another $50,000 is expected in the first month of 2021. The remainder is expected about halfway through 2021.
d. Constructs a building in the park in (b) for $80,000 cash so that local citizens can play basketball and other sports. It is put into service on July 1 and should last 10 years with no salvage value.
e. Builds a sidewalk around the new park for $10,000 cash and puts it into service on July 1. It should last for 10 years, but the city plans to keep it up to a predetermined quality level so that it will last almost indefinitely.
f. Opens the park and charges an entrance fee of only a token amount so that it records the park, therefore, in the general fund. Collections during this first year total $8,000.

Requried:
Prepare the 2020 government-wide financial statements for this city. Assume the use of the modified approach.

Answers: 3

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The City of Pfeiffer starts the year of 2020 with the general fund and an enterprise fund. The gener...