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Fund Balance Classifications. (LO2-3) Section A provides a list of the results of Allentown’s analysis of its governmental fund balances at its fiscal year end. Section B provides a list of the possible classifications for reporting the items listed in Section A.
Section A
_____ 1. At year-end a special revenue fund has a $50,000 fund balance on which there are no constraints.
_____ 2. Allentown has a $1,000,000 emergency reserve fund it set aside. According to the town ordinance, funds can only be used from this fund with approval of two-thirds of the governing body, which is the town council.
_____ 3. Allentown determined that the General Fund has $22,000 in inventory it should report on its fund financial statements.
_____ 4. Allentown issued bonds that sold at a premium. Using the authority allowed her by the town council, the city manager made the decision to set aside the $100,000 premium to pay the principal on the debt when it comes due in a future period.
_____ 5. The federal government has provided a grant for emergency housing assistance that can only be used for low-income families. Allentown determined $250,000 of the grant funds remained at year-end.
_____ 6. Allentown had a balance in its prepaid insurance account of $464,000 at the end of the fiscal year.
_____ 7. At the end of the reporting period, Allentown’s General Fund statement of revenues, expenditures, and changes in fund balances reported a net change in fund balances of $154,238.
_____ 8. Allentown’s mayor indicated that he was setting aside $25,000 of funds for the future purchase of land for a town park.
_____ 9. The Allentown council passed an ordinance requiring that 5% of the town’s sales tax revenue be set aside for economic development; this year that amount was $24,650.
_____ 10. The capital projects fund ended the reporting period with a negative fund balance.
Section B
- a. Nonspendable
- b. Restricted
- c. Committed
- d. Assigned
- e. Unassigned
Required
Using the choices provided in Section B, identify under which fund balance classification Allentown should report each of the dollar amounts listed in Section A.
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ACCT GOV.+NFP ENTITIES LOOSELEAF W/CONN.
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