The City of Maysville's General Fund balance sheet for its December 31,2013 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 2013,a grantor provided the City with $42,000 that must be used to buy musical instruments for the city's youth orchestra.No instruments had been purchased at year-end.How much should the city report as restricted fund balance in its General Fund on December 31,2013?

Question

Quizplus · Accepted Answer

The correct answer is $42,000, which represents the grant provided specifically for the purchase of musical instruments. This amount is restricted for a specific purpose and should be reported as restricted fund balance in the General Fund. The other items listed (inventory, prepaid rent, and outstanding encumbrances) do not affect the restricted fund balance in this context.

The City of Maysville's General Fund Balance Sheet for Its