Answers to 26 and 27

26. Assume that the City of Amber maintains its books and records in a manner that facilitates the preparation of the fund financial statements. Amber City maintains a general fund, a capital projects fund, and a special revenue fund. During the current fiscal year, the City engaged in the following transactions. Record all transactions. Be sure to clearly indicate the fund in which the entry is made. a. b. C. The City sold bonds, face value $26 million, at par to finance the construction of a new City Hall The City purchased two new police cars at a total cost of $50,000. The City collected $8,000 in taxes dedicated for the eradication of noxious weeds The City spent $6,000 on pesticides for noxious weeds. The City acquired a new tractor for $80,000. The City paid $20,000 in cash and signed a note that is due in three years. d. e 27. Katerah City maintains the following funds: 1. General 2. Special revenue 3. Capital projects 4. Debt service 5. Enterprise 6. Investment trust 7. Permanent 8. Agency For each of the following transactions, indicate which fund would most likely be used to report the transaction: a. The City collects $1 million of taxes for an independent fire district located within the City I b. The City spends $1.2 million on street maintenance using the proceeds of a city gas tax dedicated for road and highway maintenance and improvements. C. The City receives a bequest of $1.5 million. The donor's Will requires that the principal amount be invested in perpetuity and that the earnings on the investment be used to maintain a city park to be renamed for the donor. d. The City collects water and sewer fees of $4.2 million

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