Following are some of the county’s governmental funds. The county has asked you
ID: 2484839 • Letter: F
Question
Following are some of the county’s governmental funds. The county has asked you to determine if any of the funds listed should be classified as major funds based on the GASB size criteria.
General Fund Special Debt Service Total of all Total of all
Revenue Fund Fund Governmental Governmental &
Funds Enterprise Funds
Assets 12,000,000 1,000,000 500,000 15,000,000 21,000,000
Liabilities 3,000,000 250,000 30,000 4,580,000 5,890,000
Revenues 10,000,000 600,000 1,450,000 13,770,000 17,123,000
Expenditures/
Expenses 9,859,000 725,000 1,300,000 13,460,000 16,665,000
Required: You must show all your computations in order to receive full credit even if you have the correct final answer!!!
Clearly indicate which fund(s) you believe should be classified as major. Provide all calculations and write out your decision-making for your choice(s).
Required: You must show all your computations in order to receive full credit
Explanation / Answer
Answer:
The size criteria states that a fund must be at least 10% of the total of all the governmental funds for atleast one of the element (assets, liabilities, revenues, expenditures/expenses), and it must be atleast 5% of the total of all the governmental fundsand enterprise funds for the same element.
By looking at the above table, it is clear that the debt service funds meet the size criteria for revenue since 10% of total of all governmental funds is $1377000 and 5% of total of all the governmental funds and enterprise funds is $856150 , both of which the debt service fund exceeds.
General fund - General fund is always classified as a major fund and it meets the size criteria for all of the elements.
Therefore, general fund and debt service fund should be classified as major funds.
All other funds do not the size criteria for any of the elements.
The Thresholds for all of the elements are as follows Total of all governmental funds Required amount-10% Total of all governmental and enterprise funds Required amount - 5% Assets $ 1,50,00,000.00 $ 15,00,000.00 $ 2,10,00,000.00 $ 10,50,000.00 Liabilities $ 45,80,000.00 $ 4,58,000.00 $ 58,90,000.00 $ 2,94,500.00 Revenues $ 1,37,70,000.00 $ 13,77,000.00 $ 1,71,23,000.00 $ 8,56,150.00 Expenditures $ 1,34,60,000.00 $ 13,46,000.00 $ 1,66,65,000.00 $ 8,33,250.00