Prepare journal entries for the City of Mansion's governmental funds to record the following transactions, first for fund financial statements and then for government-wide financial statements.

1. A new truck for the street department was ordered at a cost of $51,700.
2. The city print shop did $2,640 worth of work for the public school system (but has not yet been paid).
3. A $6.05 million bond was issued to build a new bridge.
4. Cash of $308,000 is transferred from the General Fund to provide permanent financing for a municipal swimming pool that will be viewed as an Enterprise Fund.
5. The truck ordered in (a) is received at an actual cost of $53,900. Payment is not made at this time.
6. Cash of $70,400 is transferred from the General Fund to the Capital Projects Fund.
7. A state grant of $66,000 is received that must be spent to promote recycling.
8. The first $16,500 of the state grant received in (g) is appropriately expended.

For each of the following, indicate whether the statement is true or false and include a brief explanation for your answer.

1. A pension trust fund will be disclosed in the government-wide financial statements but not in the fund financial statements.
2. Permanent funds are disclosed as one of the governmental funds.
3. A police department placed orders of $44,000 for equipment. The equipment has been received but at a cost of $45,760. In compliance with requirements for fund financial statements, an encumbrance of $44,000 was recorded when the order was placed, and an expenditure of $45,760 was recorded when the order was received.
4. The government reported a biomass energy plant as an enterprise fund. At the end of Year 1, the government estimated that the biomass project will cost $962,500 to clean up when it is eventually closed. Currently, it is 12 percent expended. At the end of Year 2, the estimation was changed to $1,056,000 when it was 20 percent expended. No payments are due for several years. Fund financial statements for Year 2 should report a $95,700 expense.
5. A city reports a landfill in the General Fund. At the end of Year 1, the government anticipated the landfill would cost $1,320,000 to clean up when it is full and reported that it was 11 percent filled. At the end of Year 2, the estimates were changed to $1,265,000 and 20 percent filled. No payments are due for several years. Government-wide financial statements for Year 2 should report a $107,800 expense.
6. A lease for a communications system (that has a six-year life) is signed on January 1, Year 1, with six annual payments of $16,500. The police department will use the communications system. The first payment is to be made immediately. The present value of the $99,000 in cash flows is $71,862 based on a 10 percent rate. Fund financial statements for Year 1 should report total expenditures of $16,500.
7. An agency fund has neither revenues nor expenses but reports expenditures.
8. A lease for a communications system (that has a six-year life) is signed on January 1, Year 1, with six annual payments of $16,500. The communications system is to be used by the police department. The first payment is to be made immediately. The present value of the $99,000 in cash flows is $71,862 based on a 10 percent rate. Government- wide financial statements for Year 1 should report expenses of $22,036.