1-9 Please answer all parts and include justification! For each of the items bel
ID: 2543482 • Letter: 1
Question
1-9
Please answer all parts and include justification!
For each of the items below, identify which fund(s) would be used to account for the item and provide a justification for your answer. a. A city government issued general obligation bonds to finance the construction of a new jail. b. A tax of $1.00 per residential phone number is collected by a city government from the phone company. This amount is required by state law to be used for the operation of the 911 emergency phone system. c. A county government expended $1 million to expand the water treatment plant. d. A donor provided investments totaling $4 million to create an endowment, the earnings of which will be used to provide scholarships. e. A donor provided $50,000 to be used to purchase newspaper and magazine subscriptions for the public library. There is no requirement that the original principal may not be spent. f. A city government sold surplus street maintenance trucks for $10,000. g. A city government contributed $500,000 to a pension plan administered by the city for its teachers, public safety employees, and employees of the water department.Explanation / Answer
Types of Fund Reason a) A city government issued general obligation bonds to finance the construction of a new jail General Fund General Fund because it is from a general obligation bond and capital projects because it is designated for a new building. Capital Project Funds b) A tax of $1.00 per residential phone number is collected by a city government from the phone company. This amount is required by state law to be used for the operation of the 911 emergency phone system. Enterprises Funds It is proprietary fund because Tax collected from the phone company. c) A county government expended $1 million to expand the water treatment plant Capital project funds Capital Project because it is designated for some specific project. d) A donor provided investments totaling $4 million to create an endowment, the earnings of which will be used to provide scholarships. Permanent funds Permanent fund because only earnings are allowed to be used. e) A donor provided $50,000 to be used to purchase newspaper and magazine subscriptions for the public library. There is no requirement that the original principal may not be spent Debt service funds Debt service fund because there are funds use restriction but both principal and earnings may be used. f) A city government sold surplus street maintenance trucks for $10,000 General Fund The sale of capital assets is recorded under General fund ,no other fund specifies. g)A city government contributed $500,000 to a pension plan administered by the city for its teachers, public safety employees, and employees of the water department Pension and employee benefit fund These are fiduciary funds where government is acting as the trustee
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