**Budget Planning for Edwards City's General Fund**Edwards City has provided the following information regarding its general fund for the upcoming fiscal year. The table below summarizes the estimated revenue and the planned appropriations:### Estimated Revenue- **Property Tax:** $3,500,000- **Sales Tax:** $490,000- **Other:** $50,000### Appropriations- **Salaries:** $2,690,000- **Capital Items:** $1,320,000- **Other:** $15,000 **Question:** Which of the following would be the appropriate effect on the budgetary fund balance when the budget is recorded?1. None of these2. Credit budgetary fund balance $30,0003. **Credit budgetary fund balance $15,000** (Selected)4. Debit budgetary fund balance $30,000**Explanation:**To determine the appropriate effect on the budgetary fund balance, we need to compare the total estimated revenue with the total appropriations.- **Total Estimated Revenue:** $3,500,000 + $490,000 + $50,000 = $4,040,000- **Total Appropriations:** $2,690,000 + $1,320,000 + $15,000 = $4,025,000**Budgetary Fund Balance Impact:**- Difference: $4,040,000 (revenue) - $4,025,000 (appropriations) = $15,000Since the revenue exceeds the appropriations, the budgetary fund balance should be credited by $15,000. Hence, option number 3, "Credit budgetary fund balance $15,000," is the correct choice.

Budgetary fund balance can be calculated after deducting Appropriations from estimated revenue. If…

Edwards City has the following information for its general fund for the upcoming fiscal year. Which of the following would be the appropriate effect to budgetary fund balance when the budget is recorded? Estimated revenue Appropriations Property tax 3,500,000 Salaries Sales tax 490,000 Capital items Other 50,000 Other 2,690,000 1,320,000 15,000

Edwards City has the following information for its general fund for the upcoming fiscal year. Which of the following would be the appropriate effect to budgetary fund balance when the budget is recorded? Estimated revenue Appropriations Property tax 3,500,000 Salaries Sales tax 490,000 Capital items Other 50,000 Other 2,690,000 1,320,000 15,000

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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