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The following information pertains to the City of Williamson for 2010, its first year of legal existence. For convenience, assume that all transactions are for the General Fund, which has three separate functions: general government, public safety, and health and sanitation. Compensated absences for general government workers at year-end total $13,000. These amounts will not be taken until late in the year 2011. The city received a piece of art this year valued at $14,000 that it is using for general government purposes. There are no eligibility requirements. The city chose not to capitalize this property. The general government uses the building that was acquired and is depreciating it over 10 years using the straight-line method with no salvage value. The city uses the equipment for health and sanitation and depreciates it using the straight-line method over five years with no salvage value. The investments are valued at $103,000 at the end of the year. For the equipment that has been ordered but not yet received, the City Council (the highest decision-making body in the government) has voted to honor the commitment when the equipment is received. a. Prepare a statement of activities and a statement of net assets for governmental activities for December 31, 2010, and the year then ended. b. Prepare a statement of revenues, expenditures, and other changes in fund balances and a balance sheet for the General Fund as of December 31, 2010, and the year then ended. Assume that the city applies the consumption method.
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