Part 1 - Review the comprehensive annual financial report (CAFR) you obtained.
1. What are the principal classes of capital assets associated with governmental activities that the city reports in its financial statements?
2. What was the total amount of capital assets used in governmental activities added during the year? What was the amount retired?
3. What is the city's threshold policy on capitalizing general capital assets and intangible assets?
4. How much depreciation did, the government charge in its government-wide statements on capital assets used in governmental activities?
5. Did the government capitalize infrastructure assets acquired during the year? Did it account for infra-structure assets using the "standard" or the "modified" approach?
6. Did the government capitalize collections of art or historical treasures? Did it depreciate such collections?
7. Judging from the disclosures pertaining to investments, does the entity have any investments that appear to be especially risky? In your judgment, to which risk (e.g., credit risk, interest rate risk, foreign currency risk) is the exposure of the entity the greatest?
8. Does the government own any "unusual" securities such as derivatives? If so, does the report contain an explanation of these transactions?
Part 2 - Review the comprehensive annual financial report (CAFR) you obtained.
1. Per the city's schedule of long-term obligations, what is the total long-term obligation for both governmental and business-type activities? Does this amount reconcile with the long-term liabilities as reported on the government wide statement of net position?
2. In addition to bonds payable, what other kinds of long-term debt for governmental activities did the city report in its statement of net position?
3. Did the city increase or decrease its long-term borrowings during the year? What was the effect on total long-term liabilities at year end? Explain.
4. What is the percentage of total net bonded debt to assessed value of property? What is the amount of net debt per capita?
5. What is the city's legal debt margin?
6. Does the city have any lease obligations outstanding? Are these accounted for as operating or capital leases? Can you determine if any of these leases were initiated during this year? What is the amount of payments related to capital leases?
7. Compute the total amount of the city's direct and overlapping debt?
8. Does the city have outstanding any conduit debt?
Part 3 -
1. Indicate the activities accounted for in both internal service funds and major enterprise funds. Comment on whether any of these activities could also have been accounted for in a general or other governmental fund.
2. How are the internal service fund activities reported in the government-wide statement of net position? How are they reported in the proprietary funds statement of net position?
3. Did any of the internal service funds report significant operating surpluses or deficits for the year? Were any accumulated significant net asset balances over the years not invested in capital assets?
4. Were any of the government's enterprise funds "profitable" during the year? If so, what has the government done with the "earnings"? Has it transferred them to the general fund?
5. Does the government have revenue bonds outstanding that are related to business-type activities? If so, for what activities?
6. Do the financial statements include a statement of cash flows for proprietary funds? Is the statement on a direct or an indirect basis? In how many categories are the cash flows presented? Which of these categories resulted in net cash inflows? Which resulted in net cash outflows?
Part 4 - Review the comprehensive annual financial report (CAFR) you obtained.
1. Does the government maintain any permanent funds? If so, are they major or nonmajor funds and for what purposes?
2. Does the government maintain any fiduciary funds? If so, for what purposes?
3. Does the government contribute to one or more pension plans? Are they defined benefit or defined contribution plans? If they are defined benefit plans, are they single employer (maintained by the government itself) or multiple-employer plans?
4. Does the government report pension expenses or expenditures? If so, in which fund or funds?
5. Does the government report pension liabilities? If so, in which fund or funds?
6. Does die CAFR indicate the actuarial value of pl an assets and abilitiesTA re the plans over- or underfunded?
7. Does the CAFR include the financial statements of the pension plans? Does it indicate that the pension plans issue their own reports and that these are publicly available?
8. Did the pension fund investments have a "good year"?
9. Does the CAFR indicate that the government provides other postemployment benefits? If so, what is the nature of these benefits? How are they reported?
Part 5 -
1. Do the notes to the financial statements indicate the component units and other related entities that are included within the reporting entity? Do they indicate any units that are not included? Do they explain why these units are included or excluded?
2. How are the component units presented in the government-wide financial statements?
3. How are they presented in the fund statements?
4. Has the government entered into any joint ventures? If so, how are they reported?
5. What schedules or other information does the government report as "required supplementary information" (RSI)?
6. Does the report contain all of the statistical information presented in Table 11-3?
Part 6 -
A single contribution may affect all three types offimds.
The following events and transactions relate. to a single. contribution.
1. A high-tech firm pledged to contribute $1 million in the company's common stock to a university's business school if the school would establish a new program in the management of information tech-nology. The securities were to be placed in an endowment fund, and the annual dividend earnings were to be used to purchase computer hardware and software.
2. The business school established the program and thereby satisfied the conditions to receive the contribution.
3. The business school received the stock and placed it in an endowment fund.
4. In the first year after receiving the stock, the business school earned $30,000 in cash dividends. They were credited to an appropriate fund.
5. The business school purchased $20,000 of computer equipment.
6. The computer equipment was estimated to have a useful life of three years (no salvage). The school charged one year's depreciation.
Prepare journal entries, as necessary, to record these events and transactions. Be sure to indicate the type of fund (permanently restricted, temporarily restricted, or unrestricted) that would be affected by the entries.
Part 7 -
Financial ratios are useful in comparing one not-for-profit to another.
The data on pages 657-658 pertaining to two not-for-profit hospices were taken from CiuideStar, an online database (www.guidestar.org) that provides information about not-for-profit organizations. Names and dates have been changed. The forms 990 that are included on the website indicate that Pleasant Valley and Ancient Falls had fund-raising expenses of $38,327 and $ 11,075, respectively. Because the data were taken from an Internal Revenue Service form, the statements are not in the format required by GAAP (e.g., they do not report net assets by degree of restrictiveness).
1. Which of the two is the more likely to be able to satisfy its current liabilities as measured by the quick ratio? Include only cash and receivables.
2. Which has the greater financial resources as measured by the ratio of total expenses to net assets (excluding property, plant, and equipment)?
3. Which spends the greater percentage of its revenues on fund-raking?
4. Which directs a greater portion of its revenues to program services?
5. Based on this limited amount of information, which of the two, in your opinion, is the more fiscally sound?
|
Statement of Operations for the Year Ending December 31, 2018
|
|
Hospice
Pleasant Valley
|
Hospice
Ancient Falls
|
|
Revenues
|
|
|
|
Contribution
|
$841,162
|
$704,529
|
|
Government grants
|
94,830
|
-
|
|
Program services
|
1,555,450
|
2,331,263
|
|
Investments
|
3,455
|
146,318
|
|
Other
|
2,187
|
-
|
|
$2,497,084
|
$3,182,110
|
|
Expenses
|
|
|
|
Program services
|
$1,881,381
|
$2,521,516
|
|
Administration
|
444,853
|
403,425
|
|
Other
|
38,227
|
74,891
|
|
Total expenses
|
$2,364,461
|
$2,999,832
|
|
Excess of revenues over expenses
|
$132,623
|
$182,278
|
|
Statement of Financial Position as of December 31, 2018
|
|
Hospice Pleasant Valley
|
Hospice Ancient Falls
|
|
Assets
|
|
|
|
Cash and equivalent
|
$215,999
|
$441,229
|
|
Accounts receivable
|
141,570
|
307,252
|
|
Pledges and grants receivable
|
70,135
|
6,331
|
|
Inventories for sale or use
|
-
|
14,250
|
|
Investments/securities
|
13,063
|
2,417,152
|
|
Property, plant, and equipment
|
269,298
|
2,656,105
|
|
Other
|
1,295
|
78,801
|
|
Total assets
|
$711,360
|
$5,921,120
|
|
Liabilities
|
|
|
|
Accounts payable
|
$165,809
|
$183,483
|
|
Noncurrent loans and notes
|
161,556
|
-
|
|
Other noncurrent obligations
|
5,319
|
-
|
|
Total liabilities
|
$332,684
|
$183,483
|
|
Net assets
|
$378,676
|
$5,737,637
|
Attachment:- Annual Financial Report.rar