This problem is a continuation of Continuing Problem 2 at the end of Chapter 9. The following additional information is furnished to complete this part of the problem.

1. Croton has no activities other than governmental activities. The city’s government- wide statement of net position for the year ended December 31, 2012, showed general capital assets of $ 14,000 and related accumulated depreciation of $ 6,400.

2. Depreciation expense on Croton’s general capital assets for 2013 (including assets acquired in 2013) was $ 700, all of which was applicable to public safety.

3. The city’s government- wide statement of net position for the year ended December 31, 2012, showed bonds payable of $ 5,500. All the debt had been issued to finance capital assets. Analysis

of Croton’s debt service requirements showed that $ 700 of the total bonds payable as of December 31, 2013, should be reported as current because it is due to be paid during 2014.

4. The city’s government- wide statement of net position for the year ended December 31, 2012, showed accrued interest payable of $ 120 on its outstanding long- term debt. Analysis of the city’s debt service requirements showed accrued interest payable of $ 135 on all outstanding long- term debt as of December 31, 2013, including the debt sold by the city during 2013.

5. Croton’s government- wide statement of net position for the year ended December 31, 2012, showed accrued vacation pay of $ 75. Vacation leave records showed that, as of December 31, 2013, accumulated vacation leave had increased to $ 87, exclusive of the $ 10 due to be paid to retired police officers early in 2014. (Assume vacation leave applies only to the public safety function.)

Use the preceding information to do the following:

a. Prepare journal entries needed to convert the governmental funds financial statements to the governmental activities columns of the government- wide financial statements. Post the journal entries to a six- column work sheet similar to that shown in Table 10- 8.

b. Prepare Croton City’s government- wide financial statements— a statement of net position and a statement of activities.

c. Prepare Croton’s financial statement reconciliations— the funds balance sheet to the government- wide statement of net position and the funds statement of revenues, expenditures, and changes in fund balances to the government- wide statement of activities.