Hi CPA friend, I hope you are doing well. I have some news to share… I recently accepted a job offer with the City of Hollis. I decided to transition into governmental accounting because of the fantastic retirement benefits. I was wondering if you (my oldest, dearest friend) could help me prepare for my new job? I’ve been studying Governmental Accounting Standards to prepare for my new job, and I’ve written down a variety of questions. Could you answer the below questions and help clarify my understanding of governmental accounting? Please refer to the 6/30/14 City of Hollis’ fund financial statements (attached). QUESTIONS: 1. Which of these governmental funds are major funds? Please explain why each governmental fund is categorized as a major fund. 2. Which of these governmental funds are not major funds? Please explain why each governmental fund is categorized as a non-major fund. 3. Can I include smaller governmental funds in my listing of major funds (for voluntary, supplemental purposes)? Please explain why or why not. 4. The Government-Wide Statement of Activities includes various types of depreciable assets, so why are depreciable assets excluded from my (attached) governmental fund balance sheet? 5. Why is the Governmental Fund total balance different than the Governmental Activities total Net Assets? Please explain how to reconcile the differences between the Governmental Fund total balance and the Governmental Activities total Net Assets. ATTACHMENT PREVIEW Download attachment City of Hollis.xls CITY OF HOLLIS Balance Sheet Governmental Funds June 30th, 2014 General Community HUD Program Development Highway Construction Other Total Governmental Funds ASSETS Cash and cash equivalents Investments Receivables, net Due from other funds Receivables from other governments Liens receivable Inventories $ 3,418,485 $ 1,236,523 $ – $ 13,262,695 3,644,561 2,953,438 353,340 1,370,757 119,059 791,926 3,195,745 182,821 – – $ 10,467,037 11,000 – 5,606,792 3,485,252 10,221 1,596,038 – $ 10,261,800 27,214,984 6,972,560 1,370,757 1,715,097 3,987,671 182,821 Total Assets $ 9,408,550 $ 7,504,765 $ 13,616,035 $ 10,478,037 $ 10,698,303 $ 51,705,690 LIABILITES AND FUND BALANCES Liabilities: Accounts Payable Due to other funds Payable to other governments Deferred revenue $ 3,408,680 $ 129,975 25,369 94,074 4,250,430 6,273,045 $ 190,548 $ 250,000 1,104,632 $ 11,000 1,074,831 – $ 5,908,666 25,369 94,074 10,784,475 Total Liabilities Fund Balances: Reserved Funds: Inventories Liens receivable Encumbrances Debt service Other purposes Unreserved Funds: General fund Special revenue fund Capital projects fund Total fund balances Total Liabilities and Fund Balances 7,753,184 6,428,389 440,548 1,115,632 1,074,831 16,812,584 182,821 791,926 40,292 – 41,034 – 119,314 – 5,792,587 – 1,814,122 3,832,062 1,405,300 182,821 791,926 7,807,349 3,832,062 1,405,300 640,327 – 1,035,342 – 13,056,173 3,569,818 1,330,718 1,241,270 640,327 2,366,060 17,867,261 1,655,366 1,076,376 13,175,487 9,362,405 9,623,472 34,893,106 $ 9,408,550 $ 7,504,765 $ 13,616,035 $ 10,478,037 $ 10,698,303 $ 51,705,690 CITY OF HOLLIS Statement of Revenues, Expenditures, and Changes in Fund Balance Governmental Funds June 30th, 2014 Community HUD Program Development General REVENUES Property Taxes Franchise Taxes Public Service Taxes Fees and Fines Licenses and Permits Intergovernmental Charges for Services Investment Earnings Miscellaneous Total Revenue $ Highway Construction – $ 549,489 549,489 8,630,835 33,729,623 4,975,775 1,299,645 6,070,032 706,305 11,411,685 21,893,273 EXPENDITURES Current: General Government Public Safety Public Works Engineering Services Health & Sanitation Cemetery Culture & Recreation Community Development Education Debt Service: Principal Interest and Other Charges 51,173,436 $ – $ 4,055,505 8,969,887 606,946 2,287,794 6,119,938 2,578,191 11,374,460 552,325 87,106 881,874 66,176 86,022,165 2,731,473 417,814 – – 2,954,389 ### ### – Other – $ 4,680,19