Thorn City adopted a cash budget for FY2016 as follows. The City budget laws prohibit budgeting or operating at a deficit. During the year the City collected or spent the following amounts. Was the City in compliance with budget laws? Did the City accomplish the goal of inter-period equity? Explain the answers in detail.

Budgeted Collected/Spent Receipts from property tax collections From the 2015 levy $ 100,000 $ - From the 2016 levy $1,000,000 $ 900,000 In advance for 2017 $ 50,000 $ -0- Receipts from bonds issued $ 500,000 $ 500,000 Borrowed from bank (due in 5 years) $ -0- $ 75,000 Disbursements Salaries and wages $ 500,000 $ 500,000 Operating expenses $ 200,000 $ 275,000 City Hall annex purchased $ 500,000 $ 500,000 Payments on debt principal $ 150,000 $ 150,000 Payments on interest $ 50,000 $ 50,000 Pension contribution $ 80,000 $ -0- Explanations provided by the City for the differences between budget and actual are as follows. Property tax collections are down because the major industry in the community closed and many citizens are currently unemployed. Operating expenses are up because the only bridge over a river bisecting the City sustained damages by an uninsured motorist and had to be repaired immediately. The repair was not budgeted