Assume that the City of Coyote has already produced its financial statements for December 31, 2017, and the year then ended. The city’s general fund was only for education and parks. Its capital...

Assume that the City of Coyote has already produced its financial statements for December 31,

2017, and the year then ended. The city’s general fund was only for education and parks. Its capital

projects funds worked with each of these functions at times during the current year. The city also

had established an enterprise fund to account for its art museum.
The government-wide financial statements indicated the following figures:
∙ Education reported net expenses of $600,000.
∙ Parks reported net expenses of $100,000.
∙ Art museum reported net revenues of $50,000.
∙ General government revenues for the year were $800,000 with an overall increase in the city’s

net position of $150,000.
The fund financial statements indicated the following for the entire year:
∙ The general fund reported a $30,000 increase in its fund balance.
∙ The capital projects fund reported a $40,000 increase in its fund balance.
∙ The enterprise fund reported a $60,000 increase in its net position.
The CPA firm of Abernethy and Chapman has been asked to review several transactions that

occurred during 2017 and indicate how to correct any erroneous reporting and the impact of each

error. View each of the following situations as independent.
 During 2017, the City of Coyote contracted to build a bus stop for schoolchildren costing $10,000

as a special assessments project for which it collected $10,000 from affected citizens. The govern-
ment had no obligation in connection with this project. Both a $10,000 revenue and a $10,000

expenditure were recorded in the capital projects fund. In preparing government-wide financial

statements, an asset and a general revenue were recorded for $10,000.
a. In the general information above, the capital projects fund reported a $40,000 increase in its

fund balance for this year. What was the correct change in the capital projects fund’s balance

during 2017?
b. In the general information, a $150,000 overall increase in the city’s net position was found on

the government-wide financial statements. What was the correct overall change in the city’s net

position on the government-wide financial statements?