Question

Bertram County maintains a fund accounting system. Nevertheless, its comptroller (who recently retired from a position in private industry) prepared the following balance sheet (in millions):


The fund balance restricted for debt service represents entirely principal (not interest) on the bonds payable.
1. Recast the balance sheet, as best you can, into separate balance sheets for each of the funds that are apparently maintained by the county. Assume that the county uses a modified accrual basis of accounting that excludes recognition in its funds of both capital assets and long-term debt. Assume also that cash and investments are divided among the funds in proportion to fund balances.


2. In your opinion, which of the two presentations gives the reader a more complete picture of the county’s financial status? Why? Which presentation is easier tounderstand?


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  • CreatedAugust 13, 2014
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