Question

Question #1: Matching Fund Types with Transactions

New York City maintains the following funds:

1. General
2. Special revenue
3. Capital projects
4. Debt service
5. Enterprise
6. Investment trust
7. Permanent
8. Agency

For each of the following transactions, indicate which fund would most likely be used to report the transaction (this part was answered during class) and prepare the necessary journal entry.

1. ____8______The city collects $1 million of taxes for an independent fire district located within the city.

Journal entry:

2. ____2______The city spends $1.2 million on street maintenance using the proceeds of a city gas tax dedicated for road and highway maintenance and improvements.

Journal entry:

3. ____7______The city receives a bequest of $1.5 million. The donor’s will, requires that the principal amount be invested in perpetuity and that the earnings on the investment be used to maintain a city park to be renamed for the donor.

Journal entry:

4. ____5______The city collects water and sewer fees of $4.2 million.

Journal entry:

5. ____3______The city pays $4 million to a contractor for work on a new bridge.

Journal entry:

6. ____6______The city receives $1.3 million to invest on behalf of the county.

Journal entry:

7. ____1______The city pays its police officers wages of $325,000.

Journal entry:

8. ____4______The city pays $2.2 million in bond interest on its general obligation debt.

Journal entry:

Answer 1

Transaction ID	Account	Debit	Credit
01	Taxes	1 million
	To Agency Fund A/C		1million
02	Street Maintainence	1.2 million
	To Special revenue A/c		1.2 million
03	Bequest a/c	1.5 miilion
	To Permanent expense A/c		1.5 miilion
04	Water and Sewage Fees	4.2 million
	To Enterprise		4.2 million
05	Contractors A/c	4 million
	To Capital Projects a/c		4 million
06	Cash	1.3 million
	To Investment trust		1.3 million
07	Police Officer Wages	325,000
	To General Expenses		325,000
08	Bond Interest expenses	2.2 million
	To Debt expenses		2.2 million