Harlan City, a small city, is planning to issue its first set of..

Harlan City, a small city, is planning to issue its first set of GAAP financial statements for the year ended December 31, 2022. To prepare for the transition, the city comptroller wants to have a government wide statement of net position as of January 1, 2022, the beginning of the year. The available information includes extracts from the governmental funds portion of the balance sheet prepared as of December 31, 2021, together with other data necessary to prepare a government-wide statement of net position for governmental activities, using the economic resources measurement focus and accrual basis of accounting.

The balance sheet for the combined governmental funds as of December 31, 2021, is as follows:

Harlan City
Balance Sheet
Assets
Cash	$131,250
Property taxes receivable	63,750
Total assets	$195,000
Liabilities
Accounts payable	$32,250
Accrued salaries and other expenses	10,500
Total liabilities	42,750
Deferred Inflows of Resources
Deferred inflows of property taxes	13,500
Fund Balances
Unassigned	138,750
Total liabilities, deferred inflows
of resources, and fund balances	$195,000

The following additional information is available as of December 31, 2021:

Capital assets: Harlan’s capital asset records show that the total acquisition value of the assets in use
as of December 31, 2021, is $6,300,000. Estimated accumulated depreciation on the assets
is $3,450,000.

Bonds payable: Harlan has outstanding bonds payable of $1,950,000 as of December 31, 2021. Of this
amount, principal due to be paid during the calendar year 2022 is $112,500. Analysis of the
outstanding bonds shows that all of the debt was used to finance the acquisition of capital assets.

Interest on long-term debt: In its governmental fund statements, Harlan recognizes interest on bonds
payable when it is due and payable. It does not accrue interest for year-end stub periods that will
be paid early in the following year. Stub-period interest as of December 31, 2021, was $15,000.

Property taxes: Harlan expects that all of its property taxes receivable will be collected in 2022.
Property taxes of $13,500 were deferred because Harlan did not expect to collect them during
the first 60 days of 2022.

Other expenses: Employees may accumulate vacation pay, subject to certain limits, that they may
receive in cash on retirement. Governmental fund expenditures of $10,500 include $1,500
that the city will pay early in 2022 to retired employees. Other employees have accumulated
vacation pay of $31,500 that Harlan expects to pay when they retire in future years. No accrual
has been made for this amount.