Question

The Borough of Green Tree’s General Fund has the following net resources at year end:

• $75,000 of prepaid insurance
• $2,000 of notes receivable
• $4,000 of supplies inventory
• $80,000 state grant for road repair
• $1,000,000 contractual obligations for the purchase of playground equipment
• $250,000 to be used to fund government operations in the future
• Outstanding encumbrance of $15,000 for the purchase of equipment for the police

What would be the total Nonspendable fund balance?

$4,000

$75,000

$70,000

$81,000

Answer 1

NON SPENDABLE FUND BALANCE:-

The classification includes amounts that cannot be spent because they are either:-

* Not in Spendable form.

or

* Legally or contractually required to be maintained intact.

In the above question, Prepaid insurance,notes receivable and supplies inventory is in non spendable form. State grant for road repair in spendable form. $10,00,000 contractual obligation for the purchase of playground equipment has no relation with fund balance.$2,50,000 to be used to fund government operations in future is not affected the fund balance.

Total non Spendable fund balance = Prepaid insurance + Notes receivable +suppliers inventory

=$75000+$2000+$4000 = $81,000 Answer