Question

The following information is available about ABC city’s government funds.

Governmental Funds	Assets	Liabilities	Revenues	Expenditures
1. General Fund	$         9,408	$         7,753	$         86,022	$         88,717
2. HUD Programs	7,504	6,428	2,731	2,954
3. Community Development	13,616	440	549	2,664
4. Route 7 Construction	10,478	1,115	273	11,298
5. Impact Fees	371	61	35	755
6. Local Gas Tax	2,139	170	1,436	2,971
7. Historic District	194	4	60	47
8. Central City Development	1,618	151	4,783	6,804
9. Community Redevelopment	2,365	-	42	1,872
10. Culvert Project	-	-	1,471	1,974
11. Bridge	2,602	686	3	1,270
12. Cemetery Fund	1,405	-	72	-
	$       51,700	$       16,808	$         97,477	$       121,326
Proprietary Funds
13. Water and Sewer	12,149	4,679	11,329	6,907
14. Parking Facilities	372	672	1,344	1,582
	$       12,521	$         5,351	$         12,673	$           8,489
Totals, All Funds	$       64,221	$       22,159	$      110,150	$       129,815

Required:

Using the information above, determine which funds qualify as “major” funds using the major fund criteria and would be included in the fund financial statements.

Answer 1

As per the applicable rules major funds include:

1) General Fund

2) All those funds which are atleast 10% of the total government funds (assets, liabilities, revenues or expenses) or proprietary funds (assets, liabilities, revenues or expenses) and 5% of both governmental and proprietary funds.

______

We will have to calculate percentage of all assets, liabilities, revenues and expenses with reference to total government funds or proprietary funds as below:

Governmental Funds	Assets	Percentage of Government Funds	Percentage of Total Funds	Liabilities	Percentage of Government Funds	Percentage of Total Funds	Revenues	Percentage of Government Funds	Percentage of Total Funds	Expenditures	Percentage of Government Funds	Percentage of Total Funds
1. General Fund	$9,408	18%	15%	$7,753	46%	35%	$86,022	88%	78%	$88,717	73%	68%
2. HUD Programs	7,504	15%	12%	6,428	38%	29%	2,731	3%	2%	2,954	2%	2%
3. Community Development	13,616	26%	21%	440	3%	2%	549	1%	0%	2,664	2%	2%
4. Route 7 Construction	10,478	20%	16%	1,115	7%	5%	273	0%	0%	11,298	9%	9%
5. Impact Fees	371	1%	1%	61	0%	0%	35	0%	0%	755	1%	1%
6. Local Gas Tax	2,139	4%	3%	170	1%	1%	1,436	1%	1%	2,971	2%	2%
7. Historic District	194	0%	0%	4	0%	0%	60	0%	0%	47	0%	0%
8. Central City Development	1,618	3%	3%	151	1%	1%	4,783	5%	4%	6,804	6%	5%
9. Community Redevelopment	2,365	5%	4%	-	0%	0%	42	0%	0%	1,872	2%	1%
10. Culvert Project	-	0%	0%	-	0%	0%	1,471	2%	1%	1,974	2%	2%
11. Bridge	2,602	5%	4%	686	4%	3%	3	0%	0%	1,270	1%	1%
12. Cemetery Fund	1,405	3%	2%	-	0%	0%	72	0%	0%	-	0%	0%
(A)	$51,700			$16,808			$97,477			$121,326
10% of Total Government Funds [10%*A]	5,170			1,681			9,748			12,133
Proprietary Funds
13. Water and Sewer	12,149	97%	19%	4,679	87%	21%	11,329	89%	10%	6,907	81%	5%
14. Parking Facilities	372	3%	1%	672	13%	3%	1,344	11%	1%	1,582	19%	1%
(B)	$12,521			$5,351			$12,673			$8,489
10% of Total Proprietary Funds [10%*B]	1,252			535			1,267			849
Totals, All Funds (A+B)	$64,221			$22,159			$110,150			$129,815
5% of Total Funds [5%*(A+B)]	3,211			1,108			5,508			6,491

Based on the percentages in the above table, we can conclude that following funds would be categorized as major funds and included in the financial statements:

1) General Fund

2) HUD Programs

3) Community Development

4) Route 7 Construction

5) Water and Sewer

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Notes:

The percentages are calculated with the use of following formula:

Percentage of Government/Proprietary Funds = (Value of Assets or Liabilities or Revenues or Expenses)/Total Government or Proprietary Funds)

Percentage of Total Funds = (Value of Assets or Liabilities or Revenues or Expenses)/(Total, All Funds)