E 19-7 Transaction analysis—governmental funds Use transaction analysis to determine the effects of each of the following transactions in the general fund. Salaries paid totaled $30,000. Additional salaries incurred, but not paid, totaled $2,500. Levied property taxes of $100,000; $98,000 was collected during the year. The balance is expected to be uncollectible. Borrowed $60,000 by issuing a nine-month note bearing interest at 7 percent. Repaid the note plus interest when due. Borrowed $600,000 by issuing bonds at par. The bonds mature in 10 years. Purchased equipment costing $25,000 with cash. Sold equipment at the end of its expected useful life. The equipment had no expected residual value when acquired (at a cost of $13,000), but it sold for $1,200. Determined that it is probable that a lawsuit involving a claim against a department will result in a settlement of at least $50,000. However, it is not expected that any payments will be required for two years or more.

Question

E 19-7 Transaction analysis—governmental funds

Use transaction analysis to determine the effects of each of the following transactions in the general fund.

  1. Salaries paid totaled $30,000. Additional salaries incurred, but not paid, totaled $2,500.

  2. Levied property taxes of $100,000; $98,000 was collected during the year. The balance is expected to be uncollectible.

  3. Borrowed $60,000 by issuing a nine-month note bearing interest at 7 percent.

  4. Repaid the note plus interest when due.

  5. Borrowed $600,000 by issuing bonds at par. The bonds mature in 10 years.

  6. Purchased equipment costing $25,000 with cash.

  7. Sold equipment at the end of its expected useful life. The equipment had no expected residual value when acquired (at a cost of $13,000), but it sold for $1,200.

  8. Determined that it is probable that a lawsuit involving a claim against a department will result in a settlement of at least $50,000. However, it is not expected that any payments will be required for two years or more.

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