Question

1. The City of Baconsville engaged in the following transactions. Assume that the city maintains its books and records in a manner that facilitates the preparation of the government-wide financial statements.

Required: Prepare the appropriate journal entries. If appropriate, write “No entry required.”

1. The city purchased for cash three dump trucks for $80,000 each.

2. The city sold for $4,000, a police car that had been purchased four years ago at a cost of $30,000. At the time of acquisition, the city estimated that the police car had a useful life of five years and a salvage value of $5,000.

3. During the year, the city spent $12 million to build a third lane on both sides of the major north-south highway through town.

4. During the year the city began construction of a new city hall. By year-end, the city had made progress payments to the contractor of $3 million.

5. The city received a gift of land from a citizen. The land is to be used to build a city park. The land had been in the donor’s family since it was homesteaded. It has a fair value when contributed of $2 million.

Answer 1