{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chap017-baker 22

Chap017-baker 22 - reservation of fund equity(8 The...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 17 - Governmental Entities: Introduction and General Fund Accounting 17-22 E17-9 (continued) (5) The $12,000 of billings from the water department should be accounted for as expenditures by the general fund. Billings for water usage constitute an interfund services provided and used transaction. Note that the amount paid by the general fund, $11,500, is not the correct amount of the expenditures. The correct amount is $12,000. (6) The acquisition of supplies and the payment of salaries and wages by the general fund should be accounted for as expenditures. The entire cost of the supplies purchased should be reported as expenditures because the general fund uses the purchase method of accounting for supplies. (7) The outstanding encumbrances at June 30, 20X8, are not included in expenditures. The outstanding encumbrances will be reported on the general fund balance sheet as a
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: reservation of fund equity. (8) The repayment of the principal of the bank loan is not an expenditure. However, the amount paid for interest, $15,000, should be included in expenditures for the year ended June 30, 20X8. (9) The general fund’s $95,000 contribution to the city’s pension trust should be included in expenditures of the general fund for the year ended June 30, 20X8. The employer’s contribution to a pension trust is an example of an interfund services provided or used transaction. (10) The general fund’s lease payments should be included in the amount reported for expenditures for the year ended June 30, 20X8. (11) For proper reporting on the statement of revenues, expenditures and changes in fund balance, each expenditure should be associated with a governmental function, such as General Governmental or Streets and Highways....
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online