Question: Rose City formally integrates budgetary accounts into its general fund

Rose City formally integrates budgetary accounts into its general fund. During the year ended December 31, 2019, Rose received a state grant to buy a bus and an additional grant for bus operation in 2019. In 2019, only 90% of the capital grant was used for the bus purchase, but 100% of the operating grant was disbursed. Rose has incurred the following long-term obligations:
a. General obligation bonds issued for the water and sewer fund which will service the debt.
b. Revenue bonds to be repaid from admission fees collected from users of the municipal recreation center.
These bonds are expected to be paid from enterprise funds and are secured by Rose’s full faith, credit, and taxing power as further assurance that the obligations will be paid. Rose’s 2019 expenditures from the general fund include payments for structural alterations to a firehouse and furniture for the mayor’s office.
1. In reporting the state grants for the bus purchase and operation, what should Rose include as grant revenues for the year ended December 31, 2019?
2. Which of Rose’s long-term obligations should be accounted for in the general long-term debt account group?
3. When Rose records its annual budget, which of the following accounts indicates the amount of authorized spending limitation for the year ending December 31, 2019?
a. Restricted for Appropriations
b. Appropriations
c. Fund Balance —Assigned
d. Encumbrances
4. In Rose’s general fund balance sheet presentation at December 31, 2019, which of the following expenditures should be classified as capital assets?

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  • CreatedApril 13, 2015
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