See the following balance sheet for the town of Paris governmental funds. In addition, you learn from

Question:

See the following 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 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 that reports upon major funds.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...