Chapter 18, Problem 18.2.1E

Multiple-Choice Items on Governmental Funds [AICPA Adapted]
Select the correct answer for each of the following.

1. On December 31, 20X1, Tiffin Township paid a contractor $2,000,000 for the total cost of a new firehouse built in 20X1 on township-owned land. Financing was by means of a $1,500,000 general obligation bond issue sold at face amount on December 31, 20X1, with the remaining $500,000 transferred from the general fund. What should be reported on Tiffin’s financial statements for the capital projects fund?

1. Revenue, $1,500,000; Expenditures, $1,500,000.
2. Revenue, $1,500,000; Other Financing Sources, $500,000; Expenditures, $2,000,000.
3. Revenue, $2,000,000; Expenditure, $2,000,000.
4. Other Financing Sources, $2,000,000; Expenditures, $2,000,000.