[20 points] Evaluate the financial status of a local government by using the following financial information on pages 4 through 6. a. Explain the concepts of assets, liabilities, and fund balance (also called net assets or net position) b. Explain the mechanism of how fund balance (net asset) increases or decreases. c. Please carefully examine the financial document (pages 46 ) of a local government below. Evaluate the financial status of the government (Use "Total" column in Primary Government): First, calculate and evaluate the debt-paying ability ratio, acid test ratio, debt-to-equity ratio, and unreserved (unrestricted) fund balance. Your calculation must show what numbers you used to calculate the ratios. Then, provide your overall evaluation by using the recommended standards. [Sources for Q3: Module 10 "Balance sheet and cash flow statement," CFO memo 7, and Quiz 11] Component Net Position(Balance Sheet) Primary Govemment Unit Downtown GovernmentalActivitiesActivitiesBusiness-typeDevelopment ASSETS Current assets: Cash and cash equivalents \$ 37,126,331 \$ 24,201,588 \$ 61,327,919 \$ 25,035 Investments Accounts receivable, net Intemal balances Due from other governments Inventories, at cost Real estate-held for investment/resale Prepaid items Restricted assets - Cash and cash equivalents Total current assets Non-current assets: Recewables Intemal balances Land and other non-depreciable assets Capital assets, net of accumulated depreciation 110,565,27074,934,794185,500,064 Total non-current assets Total assets 181,097,827139,804,473147,962,347115,510,403329,060,174255,314,87625,035 DEFBRRED OUTELWS OF RESOURCES. Pension Total assets and deferred outflows of resources L1ABI ITIES: Current liakilities: DFFERRP NFLOS OF RHOURCFS- Pension Total defered inflous of resoutces NET POSITON: Net investment in capital assets Restricted for economic development Restricted for capital projects Unrestricted Total net position Us