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CITY OF GEM LAKE,. MINNESOTA <br />RECONCILIATION OF THE GOVERNMENTAL. FUNDS STATEMENT OF REVENUES, <br />EXPENDITURES AND: CHANGES I FUND BALANCE TO THE STATEMENT 0F.ACTIVITIES <br />GOVERNMENTAL ACTIVITIES <br />YEAR ENDED DECEMBER 31,2010 <br />(WITH. COMPARATIVE DATA FOR THE YEAR ENDE❑ DEGEMBER 311 2009) <br />NET CHANGE IN FUND BALANCES -TOTAL GOVERNMENTAL FUNDS <br />Amounts reported for governmental activities in the statement of activitiesare <br />different because: <br />Governmental funds report capital outlays as expenditures. Hpwever; in <br />the statement of activities, assets are capitalized.and the cost is :allocated <br />over their estimated.useful lives. and reported -as depreciation expense. <br />The loss:on disposal is not recognized at the fund level, but is recorded. <br />as an expenditure inthe statement of activities. This is the arnount by <br />which capital outlays exceeded depreciation in the. current period. <br />Depreciation Expense <br />Delinquent•arid deferred property taxes and.spec!aI assessments. <br />receivable will be collectedsubsequent to year-end, but are not. available <br />soon enough to pay for the.current p6riod's expenditures and, therefore, <br />are deferred in the governmental funds. <br />Deferred ReVenue -.December 31, 2009 $ 490,846 <br />Deferred.Revenue - December 31, 2010 410,283 <br />The. governmerital funds report bond proceeds as -financing sources, <br />while repayment of.bond principal is reported as an expenditure.. In the <br />statement of net:assets, however, issuing debt increases long-term <br />liabilities and does not affect. the statement of activities and repayment: of <br />principal reduces the liability. Also, governmental funds report.the effect of <br />issuance costs, premiums and discounts when debt is first issued, <br />whereas these amounts -are deferred. and amortized in the statement of <br />activities. Interest is recognized as an expenditure in the governmental <br />funds When it is dua. In tha s.tatellent of.activities, however, interest <br />expense is. recognized as it accrues, regardless of when it.is due. The net <br />effect of these differences. In the treatment of general .obligation bonds <br />acid related items is as follows: <br />Repayment of Bond Principal <br />91,1.79 <br />Change in Accrued I.nterest.Payable <br />1,474 <br />Amortization of Bond Issue Costs <br />(2,827) <br />Amortization of Bond Discount <br />(1,773) <br />CHANGE IN NET ASSETS OF GOVERN MENTAL. ACTIVITIES <br />See: accompanying Notes to Basic Financial Statements. <br />(10) <br />2010 2000 <br />$ 108,360 $. (6,07.6) <br />(6241:0) (28,902) <br />(80,563) (.15,307) <br />88,053 85,998 <br />$ 53,440 .$ 35,713 <br />