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CITY OF LITTLE CANADA, MINNESOTA
<br />RECONCILIATION OF THE STATEMENT OF REVENUES,
<br />EXPENDITURES, AND CHANGES IN FUND BALANCES OF
<br />GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
<br />For The Year Ended December 31, 2021
<br />With Comparative Data for the Year Ended December 31, 2020
<br />2021 2020
<br />Net changes in fund balances - total governmental funds 1,152,206$ 1,894,655$
<br />Governmental funds report capital outlays as expenditures. However, in the
<br />statement of activities the cost of those assets is allocated over their estimated useful lives
<br />and reported as depreciation expense. This is the amount by which capital outlays
<br />exceeded depreciation in the current period.
<br />Capital outlays-improvement costs 1,640,070$
<br />Proceeds from the sale of capital assets (87,000)
<br />Gain on the sale of capital assets 49,492
<br />Loss on disposal of capital assets
<br />Depreciation expense (2,041,587)(439,025) 1,551,924
<br />The governmental funds report bond proceeds as financing sources, while repayment
<br />of bond principal is reported as an expenditure. In the statement of net position
<br />however, issuing debt increases long-term liabilities and does not affect the
<br />statement of activities and repayment of principal reduces the liability. Interest
<br />is recognized as an expenditure in the governmental funds when it is due. In
<br />the statement of activities, however, interest expense is recognized as it
<br />accrues, regardless of when it is due. The net effect of these differences in the
<br />treatment of general obligation bonds and related items is as follows:
<br />Amortization of bond premium 10,358
<br />Repayment of notes payable 19,025
<br />Repayment of bond principal 280,000
<br />Change in accrued interest expense 2,312 311,695 314,489
<br />Delinquent and certain other property taxes and special assessment receivable will
<br />be collected subsequent to year-end, but are not available soon enough to pay
<br />for the current period's expenditures and, therefore, are reported as deferred
<br />inflows of resources and excluded from revenues in the governmental funds.
<br />Deferred inflows of resources - December 31, 2021 2,626,400
<br />Deferred inflows of resources - December 31, 2020 3,012,817 (386,417) (415,204)
<br />Pension expenditures in the governmental funds are measured by current year
<br />employee contributions. Pension expenses on the statement of activities are
<br />measured by the change in net pension liability and the related deferred inflows
<br />and outflows of resources.32,710 39,524
<br />Internal service funds are used by management to charge the cost of insurance
<br />to individual funds. This amount is net revenue (loss) attributable to internal
<br />governmental activities.13,094 11,578
<br />In the statement of activities, compensated absences are measured by the
<br />amounts earned during the year. In the governmental funds, however,
<br />expenditures for these items are measured by the amount of financial
<br />resources used (essentially, the amounts actually paid). During the current
<br />fiscal year, compensated absence payable changed.2,954 (17,374)
<br />Change in net position of governmental activities 687,217$ 3,379,592$
<br />The accompanying notes are an integral part of these basic financial statements.
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