Changes in mix of revenues and expenditures must be interpreted with care.The data that follow were drawn from the city of Boulder, Colorado’s CAFR. Dates have been changed. They are from two statistical-section schedules showing the mix of revenue and expenditures for a 10-year period. They include amounts only from the general fund, special revenue funds, and debt service funds. 20202021(amounts in thousands)Revenues Sales and use taxes$ 97,397$104,136General property taxes29,47429,434Other taxes20,27821,184Charges for services27,03022,670Intergovernmental16,42013,348Proceeds from bonds and notes54,830 Other 20,660 21,473Total revenues$266,089$212,245Expenditures General government and administration$ 27,717$ 30,185Public safety47,82548,202Public works22,17827,896Housing and human services13,38420,226Culture and recreation25,67728,089Capital outlay29,11119,218Debt service13,57416,375Other 16,425 27,180Total expenditures$195,891$217,371As a consultant for a citizens’ association, you have been asked to determine whether there have been significant changes in the way the city acquires and spends its resources. Prepare a schedule in which you compare the mix of revenues and of expenditures of 2020 with that of 2021. Note and comment on any items that might distort a straightforward comparison of revenues and expenditures.Comment on any changes between the two years that you consider significant.Expenditures for debt service increased significantly. What are the most likely reasons for the increase? Is it necessarily a sign of increased financial stress?

Answered: e data that follow were drawn from the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Changes in mix of revenues and expenditures must be interpreted with care.

The data that follow were drawn from the city of Boulder, Colorado’s CAFR. Dates have been changed. They are from two statistical-section schedules showing the mix of revenue and expenditures for a 10-year period. They include amounts only from the general fund, special revenue funds, and debt service funds.

	2020	2021
(amounts in thousands)
Revenues
Sales and use taxes	$ 97,397	$104,136
General property taxes	29,474	29,434
Other taxes	20,278	21,184
Charges for services	27,030	22,670
Intergovernmental	16,420	13,348
Proceeds from bonds and notes	54,830
Other	20,660	21,473
Total revenues	$266,089	$212,245
Expenditures
General government and administration	$ 27,717	$ 30,185
Public safety	47,825	48,202
Public works	22,178	27,896
Housing and human services	13,384	20,226
Culture and recreation	25,677	28,089
Capital outlay	29,111	19,218
Debt service	13,574	16,375
Other	16,425	27,180
Total expenditures	$195,891	$217,371

As a consultant for a citizens’ association, you have been asked to determine whether there have been significant changes in the way the city acquires and spends its resources. Prepare a schedule in which you compare the mix of revenues and of expenditures of 2020 with that of 2021. Note and comment on any items that might distort a straightforward comparison of revenues and expenditures.
Comment on any changes between the two years that you consider significant.
Expenditures for debt service increased significantly. What are the most likely reasons for the increase? Is it necessarily a sign of increased financial stress?

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