During the year Eustoma City's self-insurance internal service fund billedthe general fund $600,000 for "premiums," of which $60,000 was forcatastrophic losses and the balance was the premium computed on anactuarially determined basis. During the year the city incurred $500,000in claims losses. The total amount transferred to the self-insurance fundby the general fund was $620,000. The amount the city's general fundcan recognize as an expenditure is$620,000.$600,000.$540,000.$500,000.

Answered: by the general fund was $620,000. The…

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by the general fund was $620,000. The amount the city's general fund can recognize as an expenditure is

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

During the year Eustoma City's self-insurance internal service fund billed
the general fund $600,000 for "premiums," of which $60,000 was for
catastrophic losses and the balance was the premium computed on an
actuarially determined basis. During the year the city incurred $500,000
in claims losses. The total amount transferred to the self-insurance fund
by the general fund was $620,000. The amount the city's general fund
can recognize as an expenditure is
$620,000.
$600,000.
$540,000.
$500,000.

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