The City of Electri Entered the Following Transactions During 2014

question 44

Essay

The City of Electri entered the following transactions during 2014:
1.Borrowed $120,000 for a six-month term,to be paid upon receipt of property tax payments which were previously billed.
2.Used the funds borrowed to purchase a new fire truck.The truck is expected to have a 15-year useful life,and a $5,000 residual value.
3.Received $90,000 cash from a state grant.Funds are restricted for the purchase of a second fire truck.
4.Used the grant funds received to purchase a second fire truck.The truck is expected to have a 15-year useful life,and a $5,000 residual value.
5.Nonreciprocal transfer of $50,000 to the Debt Service Fund to be used toward repayment of the note.
Required:
Prepare the journal entries in the General Fund for the transactions.

Describe methods and practices for safeguarding company assets.

Recognize the factors contributing to fraudulent activities and how to prevent them.

Understand the segregation of duties principle and its application in preventing fraud.

Explain the significance of using checks for cash disbursements and the control it provides.

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Definitions:

Job Evaluation Process

A systematic approach to determining the relative worth of jobs within an organization to establish fair pay and grading levels.

Key Procedures

Essential and established methods or steps followed to complete a specific task or to achieve a particular objective within an organization.

Living Wage

A wage that is high enough to maintain a normal standard of living, covering an individual's or family's basic costs of living.

Minimum Wage

The lowest legal hourly pay that employers can compensate workers, set by government law.