Hawkins Township has two component units that it is required to include in its reporting entity. The first, a housing authority, maintains two funds: a general fund and a special revenue fund. The second, a transportation authority, has but one fund: an enterprise fund. The township itself has only a general fund.
The fund balance sheets, in highly condensed form, of all three entities are shown below (in millions). Also presented, as appropriate, are capital assets and long-term obligations that are not recognized on the fund statements, since the statements are on a modified accrual basis.

1. Assume that both component units qualify for discrete presentation. On its government-wide statements, the township elects to combine the two units into a single column.
a. Prepare a government-wide statement of net assets (on a full accrual basis) that presents both the town-ship and its component units.
b. Comment on the significance of the column in which the two component units are presented
2. Suppose instead that the town is required to blend the two component units.
a. Prepare a government-wide statement of net assets. Be sure to show the transportation authority as a business-type activity.
b. If the township were to prepare fund statements, how would it report the housing authority’s special revenue fund? How would it report its generalfund?

  • CreatedAugust 13, 2014
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