Question

The City of Moulton's capital expenditures during the year ended December 31 included:

Equipment for city tax collector's office: $40,000
Vehicles for city electric utility: $60,000
What amounts should have been recorded in the General Fund and enterprise fund for the increase in equipment during the year ended December 31, assuming the electric utility is considered an enterprise fund?

a. General Fund: $40,000; Enterprise Fund: $60,000
b. General Fund: $0; Enterprise Fund: $0
c. General Fund: $100,000; Enterprise Fund: $0
d. General Fund: $0; Enterprise Fund: $60,000

Answer 1

The City of Moulton's capital expenditure for the tax collector's office equipment of $40,000 should be recorded in the General Fund, and the $60,000 for electric utility vehicles should be recorded in the enterprise fund, making the A) answer $40,000 for the General Fund and $60,000 for the Enterprise Fund.

Step-by-step explanation:

The question concerns the recording of capital expenditures by the City of Moulton for the year ended December 31, and how these expenditures should be allocated between the General Fund and the enterprise fund. Capital expenditures for equipment used in the city tax collector's office would typically be recorded in the General Fund, while capital expenditures for vehicles used by the city electric utility, considered an enterprise fund, would be recorded in that fund. Therefore, the correct entry would be equipment for the General Fund at $40,000 and vehicles for the enterprise fund at $60,000, aligning with answer choice a. General Fund: $40,000; Enterprise Fund: $60,000.