Worksheet Adjustments for Selected Accounts) Presented here is a partial list of

Question

Worksheet Adjustments for Selected Accounts) Presented here is a partial list of accounts for the total governmental funds of the City of Bukowy. What worksheet adjustments would be required to convert this information to information that the city needs for preparing its governmentwide financial statements for 20X3? The city uses the consumption method to account for materials and supplies. 300,000 278,000 4,000,000 8,300,000 800,000 12,000,000 740,000 30,000,000 80,000,000 10,800,000 15 years 30 years 5 years Inventory of Materials and Supplies, January 1 Inventory of Materials and Supplies, December 31...... Expenditures Expenditures-Capital Outlay-Streets and Roads Other Financing Sources-Bond Anticipation Notes Other Fina ncing Sources-Capital Leases . . No capital assets were sold during the year. No depreciation expense is reported on capital assets acquired in the current year. Accrued interest payable on the capital lease at December 31 was $22,000. Accrued interest payable on the bond anticipation notes was $480,000 (Alternative Requirement: Prepare the worksheet conversion entries required for this information using the one-worksheet approach in Appendix 14-1.)

Explanation / Answer

The following adjustment required to prepare its financial statements:

1. To charge depreciation on all assets considering the additons made during the year.

2. To charge accrued interest payable on the bonds.

3. Based on the details of purchase of material and supplies, consumption of the material also charged

against income for the year.

4. Prepare Cash book to derive the closing balance of Cash/Bank on that date.

The summary sheet will be as :

Total revenue                                                          XXXX

Less: Cost of material and supplies consumed:

         Opening stock:      XXX

        Add Purchase:       XXXX

       Less: Closing Stock XXXX =                            (XXXX)

Less: Depreciation

        On building                 XX

        on Streets & Roads     XX

        On leased equipments XX =

Less: Accrued Interest                                               XXXX

NET INCOME                                                            XXXX

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