The City of Mayville had total fund balance in its General Fund of $200,000 on December 31, 2019. The City of Maysville's General Fund balance sheet for its December 31, 2019 year end shows inventory of $28,000 and prepaid rent of $10,000. The City also had $60,000 of outstanding encumbrances in its General Fund at year-end. In December 2019, a grantor provided the City with $42,000 that must be used to pay musicians who perform in the City's series of summer concerts in the park during 2020. How much should the city report as nonspendable fund balance in its General Fund on December 31, 2019?

Question

Quizplus · Accepted Answer

The inventory of $28,000 and prepaid rent of $10,000 results in nonspendable fund balance of $38,000 on December 31, 2019. Amounts encumbered from unassigned resources should be reported as Assigned fund balance because the authority given to the person that places the order results in that amount meeting the criteria for classification as assigned. Therefore, the City of Mayville has $60,000 in assigned fund balance in its General Fund on December 31, 2019. The gift of $42,000 from the grantor that cannot be used until the next fiscal year is an externally imposed restriction that results in restricted fund balance of $42,000.

The City of Mayville Had Total Fund Balance in Its