(Reporting Internal Service Fund activity in government-wide ...

[jc611]

(Reporting Internal Service Fund activity in government-wide financial statements)
 
  Regina County has an Internal Service Fund (ISF) that operates a motor pool for various county agencies, all of which receive appropriations from the General Fund.
 
  The amounts billed by the ISF during 2012 were: General government programs - 60,000; Public safety programs - 10,000; and Social services programs - 30,000 . These amounts are included in the total expenditures reported in the fund financial statements for each program.
 
   Following is a condensed ISF operating statement:
   Charges for services 120,000
   Operating expenses 80,000
   Operating income 40,000
   Nonoperating expenses 10,000
   Change in net position 30,000
   Net position, beginning of period 180,000
   Net position, end of period 210,000
 
  Required:
   a. Calculate how much Regina County should report as motor pool transportation expenses for each of its programs in its 2012 government-wide statement of activities.
   b. Assume the ISF assets are: Cash of 20,000; and Capital assets, net of depreciation, of 180,000 . Describe how the ISF assets are brought into the government-wide financial statements.

Question 2

What is Olde Towne's interest coverage?
 
  a. 2.0 times
  b. 3.0 times
  c. 4.0 times
  d. 5.0 times

[leahchrapun]

Answer to Question 1

a. Intragovernmental profit percentage included in ISF billings:
Intragovernmental profit =  30,000 / 120,000 = 25
Governmental program expenses after reduction for intragovernmental profit:

Expenditures Expenses
Fund-level 25 Government-
statement Reduction wide statement
General government.  60,000 15,000 45,000
Public safety 10,000 2,500 7,500
Social service 30,000 7,500 22,500
100,000 25,000 75,000

b. The ISF assets are brought into the government-wide statements by adding 200,000 to the governmental activity assets, with an offsetting credit to net position. The credit to reduce governmental expenditures for purposes of government-wide reporting is offset by a debit to net position.

Answer to Question 2

b

[jc611]

Excellent

[amandalm]

TYSM