Determine general fund balance sheet elements

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Reference no: EM131763845

Question: The following data comes from the 2015 financial statements of the Village of Matthews. Although presented in summarized format, the balance sheet debits and credits are equal and the operating statement information is complete.

General Fund - Balance Sheet Elements

Cash $1,200,000

Short-term investments 405,000

Property taxes receivable - delinquent 282,000

Due from other funds 58,000

Accounts payable and other accrued liabilities 900,000

Assigned fund balance 90,000

Unassigned fund balance 935,000

General Fund - Operating Statement Elements

Revenues, including property taxes of $6,125,000 $8,350,000

Expenditures (total) 7,510,000

Transfer to Debt Service Fund 400,000

Excess of revenues and other sources over expenditures
and other uses 440,000

Debt Service Fund - Balance Sheet Elements

Cash and cash equivalents 230,000

Restricted fund balance 230,000

Debt Service Fund - Operating Statement Elements

Debt service expenditures:

Principal 100,000

Interest 200,000

Operating transfer from General Fund 400,000

Excess of revenues and other sources over

expenditures and other uses 100,000

Required: Calculate the following ratios for the Village of Matthews:

a. Current ratio - General Fund

b. Quick ratio - General Fund

c. Budgetary cushion for the General Fund (Assume all unassigned & assigned fund balance is available.

d. Debt service burden

e. Excess of revenues and other sources over expenditures and other uses, as a percentage of revenues - Combined, General Fund and Debt Service Fund (Hint: Use the General Fund revenues for the denominator.)

f. Explain your results, describing what the outcome of each ratio means.

Reference no: EM131763845

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