Reconciliation Schedules
The City of Sycamore is preparing its financial reports for the year and has requested that you prepare the reconciliation schedules to accompany its government-wide financial statements based on the following information:
1. The fund balances reported in the five governmental funds as of the end of the fiscal year total $888,400. The fund balances in governmental funds at the beginning of the year totaled
$379,000.
2. The city has estimated its depreciation on capital assets to be $187,000 for the period. The city expended a total of $287,000 in capital outlays from the governmental funds. At year- end, the capital assets, net of depreciation, totaled $4,329,000. The internal service fund reported $18,000 of net capital assets. Total accumulated depreciation at year-end was
$1,208,000.
3. The internal service fund reports $178,000 in total assets and $141,000 in total liabilities.
The internal service fund reported $48,000 of revenues and $39,000 of expenses during the year.
4. The debt service fund paid $40,000 in interest during the year. The city sold bonds with a face value of $500,000 and a coupon rate of 8 percent at the beginning of the year at
$460,000 for an effective interest rate of 10 percent. Interest is paid annually on the last day of the fiscal year. The bonds were sold to provide current financial resources for the governmental funds.
5. The permanent fund recorded interest received of $4,000 under the modified accrual basis of measurement. If the accrual basis of measurement had been used in the fund, an additional
$1,000 of interest revenue would have been earned.
Required
a. Prepare a reconciliation schedule of the balance sheet of the governmental funds to the statement of net assets.
b . Prepare a reconciliation schedule of the statement of revenues, expenditures, and changes in fund balance of governmental funds to the statement of activities.