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10 February, 22:16

The Wayne City Council approved and adopted its budget for 2016. The budget contained the following amounts: Estimated revenues $700,000 Appropriations 660,000 Authorized operating transfer to the Library debt service fund 30,000 When recording the adopted budget in the general fund, budgetary fund balance should be:

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  1. 11 February, 01:00
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    Answer: The budgetary fund balance is $10,000

    Explanation: When calculating budgetary fund balance, the best method is given as:

    The available fund balance (from previous audit) + current year revenues = Total available funds - expenditures = current year ending fund balance

    What we can see from the above expression is that we add the fund from the previous year balance to the current year revenues. This will give us amount of total funds available. Now we will minus the current year expenditures from the total funds available to give us the budgetary fund balance of the current year.

    From the question above, we have the following:

    Estimated revenues = $700,000

    Appropriations (expenditures) = $660,000

    Debt service = $30,000

    Total expenditures = $660,000 + $30,000 = $690,000

    Therefore budgetary fund balance will be:

    Estimated revenues - total expenditures

    = $700,000 - $690,000

    = $10,000

    Therefore, the budgetary fund balance is $10,000.
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