In 2017, the City of Coyote received a $320,000 cash grant from the state to reduce air
Question:
In 2017, the City of Coyote received a $320,000 cash grant from the state to reduce air pollution. Assume that although a special revenue fund could have been set up, the money remained in the general fund. Cash was received immediately but had to be returned if the city had not lowered air pollution by 25 percent by 2020. On December 31, 2017, Coyote spent $210,000 of this money for a large machine to help begin the process of reducing air pollution. The machine is expected to last for five years and was recorded as an expenditure in the general fund and as an asset on the government-wide financial statements where it was depreciated based on the straight-line method and the half-year convention. Because the money had been received, all $320,000 was recorded as a revenue on both the fund and the government-wide financial statements.
a. What was the correct change for 2017 in the total fund balance reported by the general fund?
b. What was the correct overall change in the net position reported on the government-wide financial statements?
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni