Parsley City joined with two other cities to create a regional landfill authority. The initial cash investment by each community was as follows: The landfill will be governed by a seven-member board-two members chosen by each mayor and one member chosen by majority vote of the six mayoral appointees. During the first year of operation the landfill, which receives no tax dollars, generated an excess of revenues over expenses of $120,000.
REQUIRED:
Record the journal entries Parsley City should make under each of the mutually exclusive situations listed below, assuming that all participants have an equal equity interest in the authority. Indicate in which fund the entry is being made.
a) Assume that Parsley City appropriates the $15 million contribution from its general fund resources.
b) Assume that Parsley City uses the resources available in its city utility enterprise fund to make the contribution.

Question

Parsley City joined with two other cities to create a regional landfill authority. The initial cash investment by each community was as follows:  The landfill will be governed by a seven-member board-two members chosen by each mayor and one member chosen by majority vote of the six mayoral appointees. During the first year of operation the landfill, which receives no tax dollars, generated an excess of revenues over expenses of $120,000.
REQUIRED:
Record the journal entries Parsley City should make under each of the mutually exclusive situations listed below, assuming that all participants have an equal equity interest in the authority. Indicate in which fund the entry is being made. 
a) Assume that Parsley City appropriates the $15 million contribution from its general fund resources.
b) Assume that Parsley City uses the resources available in its city utility enterprise fund to make the contribution.

Quizplus · Accepted Answer

The Answer of Parsley City joined with two other cities to create a regional landfill authority. The initial cash investment by each community was as follows:  The landfill will be governed by a seven-member board-two members chosen by each mayor and one member chosen by majority vote of the six mayoral appointees. During the first year of operation the landfill, which receives no tax dollars, generated an excess of revenues over expenses of $120,000.
REQUIRED:
Record the journal entries Parsley City should make under each of the mutually exclusive situations listed below, assuming that all participants have an equal equity interest in the authority. Indicate in which fund the entry is being made. 
a) Assume that Parsley City appropriates the $15 million contribution from its general fund resources.
b) Assume that Parsley City uses the resources available in its city utility enterprise fund to make the contribution.

Parsley City Joined with Two Other Cities to Create a Regional