Option #1: Evaluating and assigning to appropriate funds

The City of Desert Foothills established the following activities after it was founded: General Fund, Governmental Activities, Enterprise Fund, Internal Service Fund, Enterprise Fund, and Permanent Fund. Assign the following transactions to the appropriate activity and explain why you assigned the transaction to the activity.

• Cash was transferred from the General Fund to establish a central duplicating Internal Service Fund in the amount of $40,000 in cash and $280,000 in equipment with accumulated depreciation of $90,000.
• The citys General Fund was billed $125,000 for water and sewage by the Utility Fund. By the last day of the year, the $123,000 was paid on the utility bill.
• The Internal Service Fund billed the citys general government function $18,400 for duplicating services and the citys Utility Fund for $8,700 for services.
• A purchase order of $27,000 was created by the general government function for computer equipment.
• A payment voucher was approved for $26,400 upon receipt of the equipment and the payment was made.

Assignment: Assign the preceding transactions to the appropriate activity indicated below and explain why you assigned the transaction to the activity.

GF General Fund

CPF Capital Projects Fund

ISF Internal Service Fund

PF Permanent Fund

SRF Special Revenue Fund (After-School Fund)

EF Enterprise Fund

GA Governmental Activities