CHAPTER 5 by L1apRHG6

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									Chapter 9

9-1.   The solution to this problem will differ from student to student, assuming each has a
       different college financial report.

9-2.   1.    C.
       2.    C.
       3.    A.
       4.    A.
       5.    B.
       6.    C.
       7.    C.
       8.    C.
       9.    D.
       10.   A.

9-3.   1.    D.
       2.    C.
       3.    C.
       4.    A.
       5.    C.
       6.    C.
       7.    C.
       8.    C.
       9.    D.
       10.   C.

9-4.

A.     Special-purpose governmental entities engaged in both governmental and business-type
       activities and in more than one governmental activity are required to follow the reporting
       guidance in Chapters 1-8 of the text. In other words, the same reports are required as for
       general purpose local governments, such as states, counties, and municipalities. Financial
       reports required include the government-wide Statement of Net Assets and Statement of
       Activities and the governmental funds Balance Sheet and Statement of Revenues,
       Expenditures, and Changes in Fund Balances. If applicable, the proprietary funds
       Statement of Net Assets, Statement of Revenues, Expenses, and Changes in Fund Net
       Assets and Statement of Cash Flows would be required. Also, if applicable, the fiduciary
       funds Statement of Fiduciary Net Assets and Statement of Changes in Fiduciary Net
       Assets would be required.

       If the special-purpose government engages in only one governmental activity, it may
       combine the government-wide Statement of Net Assets and the governmental funds
       Balance Sheet as well as the government-wide Statement of Activities with the
       governmental funds Statement of Revenues, Expenditures, and Changes in Fund
       Balances. Illustrations 9-2 and 9-3 reflect examples of those statements.



                                               9-1
9-4 (Continued).

B.     Governments engaged in business-type activities only are required to prepare
       only the statements required for proprietary funds – the proprietary funds Statement of
       Net Assets, Statement of Revenues, Expenses, and Changes in Fund Net Assets, and
       Statement of Cash Flows. They must also prepare MD&A, Notes to Financial
       Statements, and RSI other than MD&A, if applicable.

C.     Special-purpose governments engaged in fiduciary-type activities only are
       required to prepare only the statements required for fiduciary funds – the fiduciary funds
       Statement of Fiduciary Net Assets and Statement of Changes in Fiduciary Net Assets. In
       addition, if the special-purpose government is a defined-benefit pension plan, two RSI
       schedules would be required: the Schedule of Funding Progress and the Schedule of
       Employer Contributions. They must also prepare MD&A and Notes to Financial
       Statements.




                                               9-2
9-5.
                                 SOUTHERN STATE UNIVERSITY
                                  STATEMENT OF NET ASSETS
                                        JUNE 30, 2007

Assets:
Current Assets:
 Cash and Cash Equivalents                                                         $ 144,000
 Short-Term Investments                                                             1,444,000
 Accounts Receivable, Net                                                             325,000
 Inventories                                                                          333,000
   Total Current Assets                                                             2,246,000
Noncurrent Assets:
 Restricted Cash and Cash Equivalents                                                  92,000
 Long-Term Investments                                                              1,683,000
 Endowment Investments                                                              6,123,000
 Capital Assets, Net of Depreciation                                                7,236,000
       Total Noncurrent Assets                                                     15,134,000
        Total Assets                                                              $17,380,000
Liabilities:
Current Liabilities:
 Accounts Payable                                                                    265,000
 Deferred Revenue                                                                    220,000
 Long-Term Liabilities-Current Portion                                               200,000
   Total Current Liabilities                                                         685,000
Long-Term Liabilities:
 General Obligation Bonds Payable                                                   1,250,000
 Revenue Bonds Payable                                                              2,500,000
   Total Noncurrent Liabilities                                                     3,750,000
        Total Liabilities                                                           4,435,000
Net Assets:
Invested in Capital Assets, Net of Related Debt                                     3,286,000
Restricted:
 Nonexpendable                                                                      6,123,000
 Expendable                                                                         1,775,000
Unrestricted                                                                        1,761,000
   Total Net Assets                                                               $12,945,000


NOTE: Net Assets, invested in capital assets, net of related debt ($7,236,000 -
       $200,000 - $1,250,000 - $2,500,000 = $3,286,000)




                                              9-3
9-6.
                      WESTERN STATE UNIVERSITY
       STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
                        YEAR ENDED JUNE 30, 2007

Revenues:
Operating Revenues:
 Student Tuition and Fees (Net of Scholarship
   Allowances of $1,210,000)                             $ 8,135,000
 Federal Grants and Contracts                              1,221,000
 State and Local Grants and Contracts                        888,000
 Auxiliary Enterprises                                     9,321,000
   Total Operating Revenues                               19,565,000
Expenses:
Operating Expenses:
 Salaries:
   Faculty                                                $8,312,000
   Exempt Staff                                            5,432,000
 Nonexempt Wages                                           4,729,000
 Benefits                                                  3,582,000
 Scholarships and Fellowships                                988,000
 Depreciation                                              3,276,000
 Other Nonoperating Expenses                               2,982,000
   Total Operating Expenses                               29,301,000
        Operating Income (Loss)                           (9,736,000)
Nonoperating Revenues (Expenses):
State Appropriations                                      10,000,000
Gifts                                                      1,345,000
Investment Income                                            873,000
Interest on Capital Related Debt                          (1,984,000)
    Net Nonoperating Revenues                             10,234,000
      Income (Loss) Before Other Revenues, Expenses,
        Gains, or Losses                                     498,000
Capital Appropriations                                     2,100,000
Capital Grants and Gifts                                   1,110,000
Additions to Permanent Endowments                            900,000
    Increase in Net Assets                                 4,608,000
Net Assets - Beginning of Year                            35,217,000
Net Assets - End of Year                                 $39,825,000




                                                9-4
9-7.
                                  NEW CITY COLLEGE
                                  GENERAL JOURNAL
                                YEAR ENDED JUNE 30, 2007

                                                                       Debits          Credits
 A. Deferred Revenues                                                 600,000
       Operating Revenue-Student Tuition and Fees                                     600,000

 B. Accounts Receivable                                            12,000,000
       Operating Revenue-Student Tuition and Fees                                  12,000,000

       Cash                                                          9,600,000
          Accounts Receivable                                                        9,600,000

       Operating Revenues-Student Tuition and Fees                    650,000
          Deferred Revenues                                                           650,000
       (Note: The above entry may be combined.)

 C. Operating Revenue Deduction-Scholarship Allowances               1,010,000
       Accounts Receivable                                                           1,010,000

 D. Scholarships and Fellowships Expense                             760,000
       Accounts Receivable                                                            760,000

Note: After the above transactions, New City College would report $10,940,000 in
        net tuition and fee revenue in the Statement of Revenues, Expenses, and
        Changes in Net Assets. This would be computed as follows:

   Tuition and Fee Charges (entry b)                             $12,000,000
   Add: Deferred revenues at beginning of year
          (entry A)                                                  600,000
   Deduct: Deferred revenues at end of year (Entry B)               (650,000)
   Deduct: Scholarship allowance deduction(Entry C)               (1,010,000)
     Net                                                         $10,940,000


   In addition, $760,000 would be reported as an operating expense entitled, "Scholarships and
   Fellowships."




                                              9-5
9-8 A.
                             EASTERN STATE COLLEGE
                                GENERAL JOURNAL
                             YEAR ENDED JUNE 30, 2007
                                   (in thousands)
                                                         Debits   Credits
 1. Accounts Receivable                                  18,300
       Operating Revenues-Student Tuition and Fees                18,300

    Operating Revenue Deduction-Scholarship Allowances    1,210
       Accounts Receivable                                          1,210

    Operating Expenses-Scholarships and Fellowships
     Expense                                              1,420
       Accounts Receivable                                          1,420

    Cash and Cash Equivalents                            15,700
       Accounts Receivable                                        15,700

 2. Deferred Revenues                                      500
       Operating Revenues-Student Tuition and Fees                   500

    Operating Revenues-Student Tuition and Fees            550
       Deferred Revenues                                             550

 3. Cash and Cash Equivalents                            13,020
    Restricted Cash and Cash Equivalents                    800
        Nonoperating Revenues-State Appropriations                13,020
        Capital Appropriations                                       800

 4. Restricted Cash and Cash Equivalents                  3,240
         Operating Revenues-Restricted-Federal Grants
            and Contracts                                           2,310
         Operating Revenues-Restricted-State and Local
            Grants and Contracts                                     930

 5. Cash and Cash Equivalents                            12,100
    Accounts Receivable                                     200
         Operating Revenues-Auxiliary Enterprises                 12,300

 6. Cash and Cash Equivalents                              650
    Restricted Cash and Cash Equivalents                   800
         Nonoperating Revenues-Gifts                                 650
         Nonoperating Revenues-Restricted-Gifts-Other                500
         Capital Grants and Gifts                                    300




                                           9-6
9-8 (A) (Continued).
                                                            Debits   Credits

7.    Restricted Cash and Cash Equivalents                    600
          Additions to Permanent Endowments                             600

      Endowment Investments                                   600
         Restricted Cash and Cash Equivalents                           600

8.    Cash and Cash Equivalents                                50
      Restricted Cash and Cash Equivalents                    200
          Interest Receivable-Unrestricted                               50
          Interest Receivable-Restricted                                200

9.    Cash and Cash Equivalents                               175
      Interest Receivable-Unrestricted                         25
          Nonoperating Revenues-Investment Income                       200

      Restricted Cash and Cash Equivalents                   1,250
      Interest Receivable-Restricted                           250
          Nonoperating Revenues-Restricted Expendable-
            Investment Income                                          1,500

10.   Accounts Payable and Accrued Liabilities                800
         Cash and Cash Equivalents                                      800

11.   Operating Expenses-Salaries-Faculty                   14,123
      Operating Expenses-Salaries-Exempt Staff              10,111
      Operating Expenses-Nonexempt Wages                     6,532
      Operating Expenses-Benefits                            6,112
      Operating Expenses-Other                               1,100
         Cash and Cash Equivalents                                   36,878
         Accounts Payable and Accrued Liabilities                     1,100

12.   Operating Expenses-Restricted-Salaries-Faculty         2,256
      Operating Expenses-Restricted-Salaries-Exempt Staff      745
      Operating Expenses-Restricted-Nonexempt Wages            213
      Operating Expenses-Restricted-Benefits                   656
      Operating Expenses-Restricted-Other                    1,100
          Restricted Cash and Cash Equivalents                         4,612
          Accounts Payable and Accrued Liabilities                       358

13.   Operating Expenses-Depreciation                        1,410
          Accumulated Depreciation-Capital Assets                      1,410




                                             9-7
9-8 (A) (Continued).
                                                           Debits   Credits

14.   Capital Assets                                        3,265
         Restricted Cash and Cash Equivalents                         1,050
         Cash and Cash Equivalents                                    2,215

      Net Assets-Restricted-Expendable-Capital Outlay       1,050
          Net Assets-Invested in Capital Assets, Net of
           Related Debt                                               1,050

15.   Nonoperating Expenses-Interest on Capital Asset-
       Related Debt                                          348
         Cash and Cash Equivalents                                     326
         Accounts Payable and Accrued Liabilities                       22

      Long-Term Liabilities-Current Portion                  800
         Cash and Cash Equivalents                                     800

      Bonds Payable                                          300
         Long-Term Liabilities-Current Portion                         300

16.   Deposits With Bond Trustee                             100
         Cash and Cash Equivalents                                     100

      Net Assets-Unrestricted                                100
          Net Assets-Restricted-Debt Service                           100

17.   Operating Expenses-Benefits                            100
         Compensated Absences Payable                                  100

18.   Cash and Cash Equivalents                             2,450
          Short-Term Investments                                      2,400
          Non-Operating Revenues-Investment Income                       50

      Short-Term Investments                                2,650
           Cash and Cash Equivalents                                  2,650

      Short-Term Investments                                  40
      Long-Term Investments                                  120
      Endowment Investments                                   61
           Nonoperating Revenues-Investment Income                      40
           Nonoperating Revenues-Restricted-Expendable-
      Investment Income                                                120
           Nonoperating Revenues-Restricted-
             Nonexpendable-Investment Income-Restricted-
             Nonexpendable                                              61


                                               9-8
9-8 (A) (Continued).
                                                           Debits   Credits
19.   Operating Revenues-Student Tuition and Fees          18,250
      Nonoperating Revenues-State Appropriations           13,020
      Operating Revenues-Auxiliary Enterprises             12,300
      Nonoperating Revenues-Gifts                             650
      Nonoperating Revenues-Investment Income                 290
         Operating Revenue Deduction-Scholarship
           Allowances                                                1,210
         Scholarships and Fellowships Expense                        1,420
         Operating Expenses-Salaries-Faculty                        14,123
         Operating Expenses-Salaries-Exempt Staff                   10,111
         Operating Expenses-Nonexempt Wages                          6,532
         Operating Expenses-Benefits                                 6,212
         Operating Expenses-Other                                    1,100
         Operating Expenses-Depreciation                             1,410
         Nonoperating Expenses-Interest on Capital-
           Related Debt                                                 348
         Net Assets-Unrestricted                                      2,044

      Addition to Permanent Endowments                       600
      Nonoperating Revenues-Restricted-Nonexpendable-
       Investment Income                                      61
         Net Assets-Restricted-Nonexpendable                           661

      Operating Revenues-Restricted-Federal Grants and
       Contracts                                            2,310
      Operating Revenues-Restricted-State and Local
       Grants and Contracts                                  930
      Nonoperating Revenues-Restricted-Gifts-Other           500
      Nonoperating Revenues-Restricted-Expendable
       Investment Income                                    1,620
         Operating Expenses-Restricted-Salaries-Faculty               2,256
         Operating Expenses-Restricted-Salaries-Exempt
           Staff                                                        745
         Operating Expenses-Restricted-Nonexempt Wages                  213
         Operating Expenses-Restricted-Benefits                         656
         Operating Expenses-Restricted-Other                          1,100
         Net Assets-Restricted-Expendable-Other                         390

      Capital Appropriations                                 800
      Capital Gifts and Grants                               300
         Net Assets-Restricted-Expendable-Capital Outlay              1,100

      Net Assets-Unrestricted                               1,605
          Net Assets-Invested in Capital Assets, Net of
           Related Debt                                               1,605

                                              9-9
9-8 (B).
                               EASTERN STATE COLLEGE
                                  GENERAL LEDGER
                                     (not required)
                                     (in thousands)
Transactions                              Debits       Credits   Balance
Cash and Cash Equivalents
7/1/06                                                               330
1                                         15,700                  16,030
3                                         13,020                  29,050
5                                         12,100                  41,150
6                                            650                  41,800
8                                             50                  41,850
9                                            175                  42,025
10                                                        800     41,225
11                                                     36,878      4,347
14                                                      2,215      2,132
15                                                        326      1,806
15                                                        800      1,006
16                                                        100        906
18                                         2,450                   3,356
18                                                       2,650       706
Accounts Receivable
7/1/06                                                             1,100
1                                         18,300                  19,400
1                                                       1,210     18,190
1                                                       1,420     16,770
1                                                      15,700      1,070
5                                              200                 1,270
Short-Term Investments
7/1/06                                                             2,400
18                                                       2,400        ---
18                                         2,650                   2,650
18                                            40                   2,690
Interest Receivable-Unrestricted
7/1/06                                                                50
8                                                          50         ---
9                                               25                    25
Deposits With Bond Trustee
7/1/06                                                             1,800
16                                             100                 1,900




                                        9-10
9-8 (B) (Continued).

Transactions                                 Debits     Credits   Balance
Restricted Cash and Cash Equivalents
7/1/06                                                                210
3                                               800                 1,010
4                                             3,240                 4,250
6                                               800                 5,050
7                                               600                 5,650
7                                                          600      5,050
8                                               200                 5,250
9                                             1,250                 6,500
12                                                        4,612     1,838
14                                                        1,050       838
Endowment Investments
7/1/06                                                              9,100
7                                                 600               9,700
18                                                 61               9,761
Long-Term Investments
7/1/06                                                              8,400
18                                                120               8,520
Interest Receivable-Restricted
7/1/06                                                               200
8                                                          200        ---
9                                                 250                250
Capital Assets
7/1/06                                                             22,300
14                                            3,265                25,565
Accumulated Depreciation-Capital Assets
7/1/06                                                              9,210 CR
13                                                        1,410    10,620 CR
Accounts Payable and Accrued Liabilities
7/1/06                                                                800 CR
10                                                800                  ---
11                                                        1,100     1,100 CR
12                                                          358     1,458 CR
15                                                           22     1,480 CR
Deferred Revenues
7/1/06                                                               500 CR
2                                                 500                 ---
2                                                          550       550 CR
Long-Term Liabilities-Current Portion
7/1/06                                                               800 CR
15                                                800                 ---
15                                                         300       300 CR


                                           9-11
9-8 (B) (Continued).

Transactions                                     Debits      Credits   Balance
Bonds Payable
7/1/06                                                                   5,000 CR
15                                                   300                 4,700 CR
Compensated Absences Payable
7/1/06                                                                     900 CR
17                                                              100      1,000 CR
Net Assets-Invested in Capital Assets, Net of Related Debt
7/1/06                                                                   7,290 CR
14                                                             1,050     8,340 CR
19                                                             1,605     9,945 CR
Net Assets-Restricted-Nonexpendable
7/1/06                                                                   9,100 CR
19                                                              661      9,761 CR
Net Assets-Restricted-Expendable--Debt Service
7/1/06                                                                   1,800 CR
16                                                              100      1,900 CR
Net Assets-Restricted-Expendable-Capital Outlay
7/1/06                                                                    500 CR
14                                                 1,050                  550
19                                                             1,100      550 CR
Net Assets-Restricted-Expendable-Other
7/1/06                                                                   8,100 CR
19                                                              390      8,490 CR
Net Assets-Unrestricted
7/1/06                                                                   1,890 CR
16                                                   100                 1,790 CR
19                                                             2,044     3,834 CR
19                                                 1,605                 2,229 CR
Operating Revenue-Student Tuition and Fees
1                                                            18,300     18,300 CR
2                                                               500     18,800 CR
2                                                    550                18,250 CR
19                                               18,250                     ---
Operating Revenue Deduction-Scholarship Allowances
1                                                  1,210                 1,210
19                                                             1,210        ---
Nonoperating Revenues-State Appropriations
3                                                            13,020     13,020 CR
19                                               13,020                     ---




                                              9-12
9-8 (B) (Continued).

Transactions                                   Debits           Credits    Balance
Capital Appropriations
3                                                                    800       800 CR
19                                                800                           ---
Operating Revenues-Restricted-Federal Grants and Contracts
4                                                                  2,310     2,310 CR
19                                              2,310                           ---
Operating Revenues-Restricted-State and Local Grants and Contracts
4                                                                    930       930 CR
19                                                930                           ---
Operating Revenues-Auxiliary Enterprises
5                                                                12,300     12,300 CR
19                                             12,300                           ---
Nonoperating Revenues-Gifts
6                                                                    650       650 CR
19                                                650                           ---
Nonoperating Revenues-Restricted-Gifts-Other
6                                                                    500       500 CR
19                                                500                           ---
Capital Grants and Gifts
6                                                                    300       300 CR
19                                                300                           ---
Additions to Permanent Endowments
7                                                                    600       600 CR
19                                                600                           ---
Nonoperating Revenues-Investment Income
9                                                                    200       200 CR
18                                                                    50       250 CR
18                                                                    40       290 CR
19                                                290                           ---
Nonoperating Revenues-Restricted-Expendable-Investment Income
9                                                                  1,500     1,500 CR
18                                                                   120     1,620 CR
19                                              1,620                           ---
Nonoperating Revenues-Restricted-Nonexpendable Investment Income
18                                                                    61        61 CR
19                                                 61                           ---
Operating Expenses-Scholarships and Fellowships Expense
1                                               1,420                        1,420
19                                                                 1,420        ---
Operating Expenses-Salaries-Faculty
11                                             14,123                       14,123
19                                                               14,123         ---



                                            9-13
9-8 (B) (Continued).

Transactions                                 Debits      Credits   Balance
Operating Expenses-Salaries-Exempt Staff
11                                              10,111              10,111
19                                                       10,111         ---
Operating Expenses-Nonexempt Wages
11                                               6,532               6,532
19                                                         6,532        ---
Operating Expenses-Benefits
11                                               6,112               6,112
17                                                 100               6,212
19                                                         6,212        ---
Operating Expenses-Other
11                                               1,100               1,100
19                                                         1,100        ---
Operating Expenses-Restricted-Salaries-Faculty
12                                               2,256               2,256
19                                                         2,256        ---
Operating Expenses-Restricted-Salaries-Exempt Staff
12                                                 745                 745
19                                                          745         ---
Operating Expenses-Restricted-Salaries-Nonexempt Wages
12                                                 213                 213
19                                                          213         ---
Operating Expenses-Restricted-Benefits
12                                                 656                 656
19                                                          656         ---
Operating Expenses-Restricted-Other
12                                               1,100               1,100
19                                                         1,100        ---
Operating Expenses-Depreciation
13                                               1,410               1,410
19                                                         1,410        ---
Nonoperating Expenses-Interest on Capital-Related Debt
15                                                 348                 348
19                                                          348         ---




                                          9-14
9-8 (C).
                               EASTERN STATE COLLEGE
                              STATEMENT OF NET ASSETS
                                    JUNE 30, 2007
                                     (in thousands)
Assets:
Current Assets:
 Cash and Cash Equivalents                              $     706
 Short-Term Investments                                     2,690
 Accounts Receivable                                        1,270
 Interest Receivable                                           25
 Deposits With Bond Trustee                                 1,900
    Total Current Assets                                    6,591
Noncurrent Assets:
 Restricted Cash and Cash Equivalents                          838
 Endowment Investments                                       9,761
 Long-Term Investments                                       8,520
 Interest Receivable-Restricted                                250
Capital Assets, Net of Accumulated Depreciation             14,945
    Total Noncurrent Assets                                 34,314

       Total Assets                                         40,905
Liabilities:
Current Liabilities:
 Accounts Payable and Accrued Liabilities                   1,480
 Deferred Revenue                                             550
 Noncurrent Liabilities-Current Portion                       300
   Total Current Liabilities                                2,330
Noncurrent Liabilities:
 Bonds Payable                                              4,700
 Compensated Absences Payable                               1,000
   Total Noncurrent Liabilities                             5,700
        Total Liabilities                                   8,030
Net Assets:
Invested in Capital Assets, Net of Related Debt             9,945
Restricted for:
 Nonexpendable                                              9,761
 Expendable:
   Debt Service                                           1,900
   Capital Outlay                                           550
   Other                                                  8,490
Unrestricted                                              2,229
   Total Net Assets                                     $32,875




                                             9-15
9-8 (D).
                              EASTERN STATE COLLEGE
     STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
                               YEAR ENDED JUNE 30, 2007
                                       (in thousands)
Revenues:
Operating Revenues:
 Student Tuition and Fees (Net of Scholarship
   Allowances of $1,210)                                  $ 17,040
 Federal Grants and Contracts                                2,310
 State and Local Grants and Contracts                          930
 Auxiliary Enterprises                                      12,300
   Total Operating Revenues                                 32,580
Expenses:
Operating Expenses:
 Salaries:
   Faculty                                                  16,379
   Exempt Staff                                             10,856
 Nonexempt Wages                                             6,745
 Benefits                                                    6,868
 Depreciation                                                1,410
 Scholarships and Fellowships                                1,420
 Other                                                       2,200
   Total Operating Expenses                                 45,878
        Operating Income (Loss)                             (13,298)
Nonoperating Revenues (Expenses):
State Appropriations                                         13,020
Gifts                                                         1,150
Investment Income                                             1,971
Interest on Capital Related Debt                               (348)
    Net Nonoperating Revenues                                15,793
      Income (Loss) Before Other Revenues, Expenses,
        Gains, or Losses                                      2,495
Capital Appropriations                                          800
Capital Grants and Gifts                                        300
Additions to Permanent Endowments                               600
    Increase in Net Assets                                    4,195
Net Assets:
Net Assets - Beginning of Year                               28,680
Net Assets - End of Year                                    $32,875




                                           9-16
9-8 (E).
                             EASTERN STATE COLLEGE
                            STATEMENT OF CASH FLOWS
                             YEAR ENDED JUNE 30, 2007
                                   (in thousands)

Cash flows From Operating Activities:
Tuition and Fees                                                $15,700
Federal Grants and Contracts                                      2,310
State and Local Grants and Contracts                                930
Auxiliary Enterprise Charges                                     12,100
Payments to Suppliers                                            (1,542)
Payments to Employees, Including Benefits                       (40,748)
    Net Cash Provided (used) by Operating Activities            (11,250)
Cash Flows From Noncommittal Financing Activities:
State Appropriations                                             13,020
Gifts for Other Than Capital Purchases                            1,150
Gifts, for Endowment Purposes                                       600
    Net Cash Provided by Noncapital Financing Activities         14,770
Cash Flows From Capital and Related Financing Activities:
Capital Appropriations                                              800
Capital Grants and Gifts                                            300
Purchase of Capital Assets                                       (3,265)
Interest on Capital-Related Debt                                   (326)
Payment of Principal on Capital-Related Debt                       (800)
Cash Deposited With Bond Trustee                                   (100)
    Net Cash Provided (used) by Capital and Related Financing
        Activities                                               (3,391)
Cash Flows From Investing Activities:
Purchase of Endowment Investments                                  (600)
Interest on Investments                                           1,675
Proceeds From Sale of Investments                                 2,450
Purchase of Investments                                          (2,650)
    Net Cash Provided by Investing Activities                       875
    Net Increase in Cash                                          1,004
    Net Assets - Beginning of Year                                  540
Cash-End of Year                                                 $1,544




                                            9-17
9-8 (E) (Continued).

Reconciliation of net operating revenues (expenses) to net cash flows provided (used) by
operating activities

 Operating Income (Loss)                                                       $(13,298)
 Adjustments to Reconcile Operating Income (Loss) to Net
   Cash Provided (Used) by Operating Activities:
        Depreciation Expense                                                      1,410
        Change in Assets and Liabilities:
          Receivables                                                              (170)
          Deposit With Bond Trustee                                                (100)
          Accounts Payable and Accrued Liabilities                                  758
          Deferred Revenue                                                           50
          Compensated Absences                                                      100
 Net Cash Provided (Used) by Operating Activities                              $(11,250)

Note: In order to complete the reconciliation, assume that $100,000 of the beginning
       balance of accounts payable and accrued liabilities were related to debt service and capital
       outlay; thus out of the province of operating activities. This leaves the beginning balance
       of $700,000. Cash was paid for the plant acquisition in entry #14. $22,000 of the
       $1,480,000 ending balance in accounts payable and accrued liabilities relates to capital
       outlay, leaving a balance of $1,458,000 that relates to operations. As a result, the increase
       that relates to operations amounts to $758,000 ($1,458,000 - $700,000).




                                               9-18

								
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