A city engaged in the following transactions during a year:\t1. It acquired computer equipment at a cost of $40,000.\tIt completed construction of a new jail, incurring $245,000 in new costs. In the previous year the city had incurred $2.5 million in construction costs. The project was accounted for in a capital projects fund\t2. It sold for $16,000 land that it had acquired three years earlier for $28,000.\t3. It traded in a four-year-old sanitation department vehicle for a new model. The old vehicle had initially cost $27,000, its carrying value at the time of trade was $17,000, and its market value was $13,000. The city paid an additional $39,000 cash for the new model. The fair value of the new model was $52,000.\t\u00a0\t\u00a0\t\u00a0\t\u00a0\tNow let’s examine the results for Exercise 8-7, differentiating transactions of debt between the two entities. (a. = General Fund, b. = Governmentwide Statements)\t1. City employees earned $7.7 million in vacation pay during the year, of which they took only $6.6 million. They may take the balance in the following three years.\t2. The employees were paid $0.5 million for vacations that they had earned in previous years.\t3. The city settled a claim brought against it during the year by a building contractor. The city agreed to pay $10 million immediately and $10 million at the end of the following year.\t4. The city issued $100 million in general obligation bonds at par.\t5. It paid $4 million in debt service. Of this, $3 million was for the first payment of interest, the balance for repayment of principal.<\/p>\n","protected":false},"excerpt":{"rendered":"
A city engaged in the following transactions during a year: 1. It acquired computer equipment at a cost of $40,000. It completed construction of a new jail, incurring $245,000 in new costs. In the previous year the city had incurred Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-200082","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/200082","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=200082"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/200082\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=200082"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=200082"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=200082"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}