Question

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End of Chapter 1 Problem 1-9 1-9. For each of the items below, identify which fund(s) would be used to account for the item and provide a justification for your answer. a. A city government issued general obligation bonds to finance the construction of a new jail. b. A tax of $1.00 per residential phone number is collected by a city government from the phone company. This amount is required by state law to be used for the operation of the 911 emergency phone system. c. A county government expended Sl million to expand the water treatment plant. d. A donor provided investments totaling S4 million to create an endowment, the earnings of which will be used to provide scholarships. c. A donor provided 550.000 to be used to purchase newspaper and magazine subscriptions for the public library. There is no requirement that the original principal may not be spent. f. A city government sold surplus street maintenance trucks for $10.000 g. A city government contributed $500,000 to a pension plan administered by the city for its teachers, public safety employees, and employees of the water department

Answer 1

a)Ans: Governmental Fund used to finance the construction of a new jail because this find is related to debt service fund.

b)Ans: fiduciary Fund is used to for the emergency phone services system because it is agency fund

c)Ans: Proprietary Fund is used to expand the water treatment plant because this fund is enterprise fund

d)Ans: fiduciary Fund is used to provide scholarships because this fund is private fund.

e)Ans: fiduciary Fund is used to purchase newspaper and magazine subscription for the public library because this fund is private fund.

f) Ans: Government fund is used for the street maintenance truck because this fund is special revenue fund.
g) Ans: Governmental Fund used to pension plan administered by the city for it' teacher , public safety employees and employees of the water department because it is public related fund.