Question: See the following balance sheet for the town of Paris

See the following balance sheet for the town of Paris governmental funds. In addition, you learn from other records that the town has capital assets with a book value (net of depreciation) of $1,450 million and has outstanding long-term bonds of $1,315 million.
1. Recast the balance sheets (taking into account the information on capital assets and long-term debt) in the form of a single consolidated, full accrual, government-wide statement of net position.
2. Put yourself in the place of an analyst. The town mayor presents you with the government-wide statement of net position similar to the one you just prepared. She asserts that the town is in excellent fiscal condition as measured by the exceedingly ‘‘healthy’’ balance of net position. Based on your having seen the combined balance sheet that shows the individual funds, why might you be skeptical of her claim?
3. Comment on why a government-wide consolidated statement of net position is no substitute for a combined balance sheet that reports upon major funds.

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  • CreatedAugust 13, 2014
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