Ex$5$:

Following are some of XYZ City's transactions during the

calendar year $2020.$ For each transaction, state $($a$)$ the

amount the Village would report as expenditures for the year

$2020$ if the transaction occurred in a governmental$-$type fund

and $($b$)$ the amount it would report as expenses for the year

if the transaction occurred in an Enterprise Fund.

$xYZ$ paid $$5,000$ in utilities during the year. In addition,

during the last pay period, they received utility bills that

amounted to $$1,000$ but that amount was not paid until

January $3,2021.$

XYZ City purchased office equipment in cash amounted to

$$8,000.$ It had an estimated useful life of $4$ years. The

salvage value of these assets is $$2,000.$

XYZ City paid monthly rental amounted to $$4,000.$

XYZ City has a General Fund and an Enterprise Fund.

During the year, legal claims are filed against the resources

of both funds. City attorneys believe that each claim will

ultimately be settled for about $$100,000,$ but settling claims

of this kind usually is about a two$-$year process. How much

should be reported as a liability in each fund's balance sheet

at the end of the current year?

XYZ City borrow from the bank using tax anticipation notes

payable on February $2021$ and on $31$ March $2021$ paid debt

principal, $$10,000$; payment of interest, $$2,200.$

Required:

a$.$ Based on the preceding transactions, compute

total annual expenditures for this department

assuming it performs governmental$-$type activities

and is accounted for in the General Fund.

b$.$ Then compute the total annual expenses for this

department assuming it performs activities within

an Enterprise Fund.