Question

Reconciliations required to yield government-wide financial statements from fund financial statements and preparation o financial statements
The City of Bar Harbor is preparing its government-wide financial statements for the year. Its accountant must prepare a number of journal entries to recognize assets and liabilities previously omitted from the fund financial statements and to recognize revenues and expenses for the year under accrual accounting that were not recognized under the current financial resources measurement focus and the modified accrual basis of accounting used to prepare the Statement of Revenues, Expenditures, and Changes in Fund Balances for its funds.

a. Prepare the journal entries for the required reconciliations to recognize the following in the government-wide financial statements (all amounts in $1,000s):

1. Recognize Capital Assets of $199,360 as of the beginning of the year.

Reconciliation Spreadsheet
Description	Debit	Credit
AnswerCapital assets, netNet positionAccrued interestBonds payableCompensated absencesLandfill closure and postclosure care costsDeferred revenuesRevenuesOther financing sources--proceeds from bondsExpenditures--capital outlayExpenditures--debt principal paymentsDepreciation expenseCompensated absences expenseInterest expense	Answer	Answer
AnswerCapital assets, netNet positionAccrued interestBonds payableCompensated absencesLandfill closure and postclosure care costsDeferred revenuesRevenuesOther financing sources--proceeds from bondsExpenditures--capital outlayExpenditures--debt principal paymentsDepreciation expenseCompensated absences expenseInterest expense	Answer	Answer

2. Record Depreciation Expense of $9,968 for the year and reverse Expenditures of $11,962 for Capital Outlays during the year.

Depreciation expense	Answer	Answer
AnswerCapital assets, netNet positionAccrued interestBonds payableCompensated absencesLandfill closure and postclosure care costsDeferred revenuesRevenuesOther financing sources--proceeds from bondsExpenditures--capital outlayExpenditures--debt principal paymentsDepreciation expenseCompensated absences expenseInterest expense	Answer	Answer
AnswerCapital assets, netNet positionAccrued interestBonds payableCompensated absencesLandfill closure and postclosure care costsDeferred revenuesRevenuesOther financing sources--proceeds from bondsExpenditures--capital outlayExpenditures--debt principal paymentsDepreciation expenseCompensated absences expenseInterest expense	Answer	Answer

3. Recognize $7,000 of Bonds Payable as of the beginning of the year.

AnswerCapital assets, netNet positionAccrued interestBonds payableCompensated absencesLandfill closure and postclosure care costsDeferred revenuesRevenuesOther financing sources--proceeds from bondsExpenditures--capital outlayExpenditures--debt principal paymentsDepreciation expenseCompensated absences expenseInterest expense	Answer	Answer
AnswerCapital assets, netNet positionAccrued interestBonds payableCompensated absencesLandfill closure and postclosure care costsDeferred revenuesRevenuesOther financing sources--proceeds from bondsExpenditures--capital outlayExpenditures--debt principal paymentsDepreciation expenseCompensated absences expenseInterest expense	Answer	Answer

4. Reverse Other Financing Sources of $2,000 and Expenditures – Debt Payments of $700 relating to increases and decreases in the bond liability during the year.

AnswerCapital assets, netNet positionAccrued interestBonds payableCompensated absencesLandfill closure and postclosure care costsDeferred revenuesRevenuesOther financing sources--proceeds from bondsExpenditures--capital outlayExpenditures--debt principal paymentsDepreciation expenseCompensated absences expenseInterest expense	Answer	Answer
Bond payable	Answer	Answer
AnswerCapital assets, netNet positionAccrued interestBonds payableCompensated absencesLandfill closure and postclosure care costsDeferred revenuesRevenuesOther financing sources--proceeds from bondsExpenditures--capital outlayExpenditures--debt principal paymentsDepreciation expenseCompensated absences expenseInterest expense	Answer	Answer

5. Reverse Deferred Revenue of $27,300 as of the beginning of the year.

AnswerCapital assets, netNet positionAccrued interestBonds payableCompensated absencesLandfill closure and postclosure care costsDeferred revenuesRevenuesOther financing sources--proceeds from bondsExpenditures--capital outlayExpenditures--debt principal paymentsDepreciation expenseCompensated absences expenseInterest expense	Answer	Answer
AnswerCapital assets, netNet positionAccrued interestBonds payableCompensated absencesLandfill closure and postclosure care costsDeferred revenuesRevenuesOther financing sources--proceeds from bondsExpenditures--capital outlayExpenditures--debt principal paymentsDepreciation expenseCompensated absences expenseInterest expense	Answer	Answer

6. Reverse $1,365 of Deferred Revenue recognized during the year.

AnswerCapital assets, netNet positionAccrued interestBonds payableCompensated absencesLandfill closure and postclosure care costsDeferred revenuesRevenuesOther financing sources--proceeds from bondsExpenditures--capital outlayExpenditures--debt principal paymentsDepreciation expenseCompensated absences expenseInterest expense	Answer	Answer
AnswerCapital assets, netNet positionAccrued interestBonds payableCompensated absencesLandfill closure and postclosure care costsDeferred revenuesRevenuesOther financing sources--proceeds from bondsExpenditures--capital outlayExpenditures--debt principal paymentsDepreciation expenseCompensated absences expenseInterest expense	Answer	Answer

7. Recognize Compensated Absences of $3,988 as of the beginning of the year and an increase in that liability of $199 during the year.

Net position	Answer	Answer
AnswerCapital assets, netNet positionAccrued interestBonds payableCompensated absencesLandfill closure and postclosure care costsDeferred revenuesRevenuesOther financing sources--proceeds from bondsExpenditures--capital outlayExpenditures--debt principal paymentsDepreciation expenseCompensated absences expenseInterest expense	Answer	Answer
AnswerCapital assets, netNet positionAccrued interestBonds payableCompensated absencesLandfill closure and postclosure care costsDeferred revenuesRevenuesOther financing sources--proceeds from bondsExpenditures--capital outlayExpenditures--debt principal paymentsDepreciation expenseCompensated absences expenseInterest expense	Answer	Answer

8. Recognize $20 of Accrued Interest Payable as of the beginning of the year and an increase in that liability of $33 during the year.

Net position	Answer	Answer
AnswerCapital assets, netNet positionAccrued interestBond and notes payableCompensated absencesLandfill closure and postclosure care costsDeferred revenuesRevenuesOther financing sources--proceeds from bondsExpenditures--capital outlayExpenditures--debt principal paymentsDepreciation expenseCompensated absences expenseInterest expense	Answer	Answer
AnswerCapital assets, netNet positionAccrued interestBonds payableCompensated absencesLandfill closure and postclosure care costsDeferred revenuesRevenuesOther financing sources--proceeds from bondsExpenditures--capital outlayExpenditures--debt principal paymentsDepreciation expenseCompensated absences expenseInterest expense	Answer	Answer

9. Recognize a liability of $5,482 relating to the City’s landfill as of the beginning of the year. The estimate for this liability did not change during the year.

AnswerCapital assets, netNet positionAccrued interestBonds payableCompensated absencesLandfill closure and postclosure care costsDeferred revenuesRevenuesOther financing sources--proceeds from bondsExpenditures--capital outlayExpenditures--debt principal paymentsDepreciation expenseCompensated absences expenseInterest expense	Answer	Answer
AnswerCapital assets, netNet positionAccrued interestBonds payableCompensated absencesLandfill closure and postclosure care costsDeferred revenuesRevenuesOther financing sources--proceeds from bondsExpenditures--capital outlayExpenditures--debt principal paymentsDepreciation expenseCompensated absences expenseInterest expense	Answer	Answer Mark 1.00 out of 1.00

Answer 1

1	Assets	199360
	Bank		199360
2	Depreciation	9968
	Acc Dep		9968
3	Expenses	11962
	Capital Outlays		11962
4	Bank	7000
	Bonds Payable		7000
5	P&L	2000
	O/S Bonds Payable		2000
6	Bonds Payable	700
	P&L		700
7	Deferred Tax Revenue	27300
	DT Liability		27300
8	Wage	4187
	Advance Compensation Payable		4187
9	P&L	199
	Wage		199
10	Interest	20
	Acc Interest		20
11	Interest	33
	Acc Interest		33
12	P&L	33
	Interest		33
13	Landfill Expenses	5482
	Landfill Expenses Payable		5482