Chap018-baker 47

Chap018-baker 47 - The 5% criterion test is met if at least...

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Chapter 18 - Governmental Entities: Special Funds and Government-Wide Financial Statements 18-47 P18-25 Determining Whether a Special Revenue Fund Is a Major Fund Test 1 : 10% criterion: Are the assets, liabilities, revenues, or expenditures of the special revenue fund at least 10% of their respective totals for all governmental funds? Totals for Amount Reported by Items Tested Governmental Funds Special Revenue Fund 1. Assets $50,000,000 $4,100,000 ( 8.2%) (10% test failed) 2. Liabilities 22,000,000 3,900,000 (17.7%) (10% test met) 3. Revenues 70,000,000 6,700,000 ( 9.6%) (10% test failed) 4. Expenditures 60,000,000 6,500,000 (10.8%) (10% test met) Test 2: 5% criterion: Two items met the 10% criterion test--liabilities and expenditures.
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Unformatted text preview: The 5% criterion test is met if at least one of the items that met the 10% criterion first test is at least 5% of the respective amounts for all governmental and enterprise funds. Totals for Amount reported Governmental and by Special Items Tested Enterprise Funds Revenue Fund 2. Liabilities $37,000,000 $3,900,000 (10.5%) (5% test met) 4. Expenditures/expenses 82,000,000 6,500,000 ( 7.9%) (5% test met) Conclusion: The special revenue fund should be reported as a major fund on the financial statements of the governmental funds for 20X2 because both its expenditures and liabilities met the 10% and the 5% tests....
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