Task: The combined governmental fund balance sheet of the town of Paris is presented below.
|
|
General
Fund
|
Special
Revenue
Fund
|
Capital
Projects
Fund
|
Debt
Service
Fund
|
Permanent
(Endowment)
Fund
|
Totals
|
|
Assets:
|
|
|
|
|
|
|
|
Cash
|
$ 38
|
$ 20
|
S 35
|
$340
|
S 10
|
$ 443
|
|
Investments
|
105
|
60
|
480
|
136
|
960
|
1,741
|
|
Due from Other Funds
|
-
|
_1_2Q
|
_S
|
_12
|
-
|
_.191
|
|
Total Assets
|
$143
|
$200
|
$561
|
$515
|
S970
|
$2,389
|
|
Liabilities and
|
|
|
|
|
|
|
|
Fund Balances:
|
|
|
|
|
|
|
|
Accounts Payable
|
$ 8
|
-
|
-
|
-
|
-
|
$ 8
|
|
Due to Other Funds
|
205
|
-
|
-
|
-
|
-
|
205
|
|
Fund Balances
|
(70)
|
5200
|
$561
|
$515
|
$970
|
2 176
|
|
Total Liabilities and
Fund Balances
|
$143
|
ato
|
$561
|
$515
|
Lno
|
$2,389
|
Per schedules included in the notes to the financial statements, the town had $1450 of capital assets (net of accumulated depreciation) and $1314 in long-term liabilities associated with the capital assets.
1. Recast the balance sheets in the form of a single consolidated, full accrual balance sheet.
2. Put yourself in the place of an analyst. The town mayor presents you with the consolidated balance sheet. He asserts that the town's financial position is excellent, as measured by the exceedingly healthy fund balance. Based on your having seen the combined balance sheet that shows the individual fund types, why might you be skeptical of his claim?
3. Comment on why a consolidated balance sheet is no substitute for a combined balance sheet that reports on major funds.