Question

The governmental funds of the City of Westchester report $552,000 in assets and $182,000 in liabilities. The following are some of the assets that the government reports. • Prepaid items—$13,000. • Cash from a bond issuance that must be spent within the school system according to the bond indenture—$106,500. • Supplies—$8,950. • Investments given by a citizen that will be sold soon with the proceeds used to beautify a public park—$35,500. • Cash that the assistant director of finance designated for use in upgrading the local roads—$59,500. • Cash from a state grant that must be spent to supplement the pay of local kindergarten teachers—$55,500. • Cash that the city council (the highest level of decision-making authority in the government) voted to use in renovating a school gymnasium—$70,250.

On a balance sheet for the governmental funds, what fund balance amounts should the City of Westchester report? Fund balance-nonspendable Fund balance-restricted Fund balance-committed Fund balance-assigned Fund balance-unassigned Total fund balance

Answer 1

On a balance sheet for the governmental funds, the City of Westchester should report the following fund balance amounts:

**Fund Balance - Nonspendable:** $106,500 (Cash from bond issuance that must be spent within the school system according to the bond indenture) + $35,500 (Investments given by a citizen that will be sold soon with the proceeds used to beautify a public park) = $142,000

**Fund Balance - Restricted:** $55,500 (Cash from a state grant that must be spent to supplement the pay of local kindergarten teachers) + $70,250 (Cash that the city council voted to use in renovating a school gymnasium) = $125,750

**Fund Balance - Committed, Assigned, and Unassigned:** Since the specific amounts for these categories are not provided in the information given, we cannot determine the values.

**Total Fund Balance:** To calculate the total fund balance, we add up the fund balance amounts mentioned above:

$142,000 (Fund Balance - Nonspendable) + $125,750 (Fund Balance - Restricted) + Fund Balance - Committed + Fund Balance - Assigned + Fund Balance - Unassigned