Exercise 2-6 and Problem 3-1 Let’s begin with Exercise 2-6. For each of the following transactions, I will indicate the fund in which each transaction would most likely be recorded: 1. The city collects $3 million of taxes on behalf of the county in which it is located: 2. It spends $4 million to pave city streets, using the proceeds of a city gasoline tax dedicated for road and highway improvements: 3. It receives a contribution of $5 million. Per the stipulation of the donor, the money is to be invested in marketable securities, and the interest from the securities is to be used to maintain a city park: 4. It collects $800,000 in landing fees at the city-owned airport: 5. It earns $200,000 on investments set aside to make principal payments on the city’s outstanding bonds. The bonds were issued to finance improvements to the city’s tunnels and bridges: 6. It pays $4 million to a contractor for work on one of these bridges: 7. It pays $80,000 in wages and salaries to police officers: 8. It purchases from an outside supplier $40,000 of stationery that it will “sell”� to its various operating departments: Problem 3-1, beginning with a budget recorded in both the Cash Basis and the Accrual Basis
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