EX. 5-3i. $300,000 j. $900,000 k. $1,925,000 l. $4,500,000 m. $5,000,000 n. $8,000,000 o. $8,900,000Transactions may have significantly different impacts on a government’s budget, governmental fund state- ments, and government-wide statements.A city prepares its budget on a cash basis. For each of the following indicate the amount (if any) of an expenditure/expense that the city would be recognize in (1) its budget, (2) its fund statements, and (3) its government?wide statements. Provide a brief explanation of your response.When permitted an option, the city uses the purchases method to account for its inventory.It is the policy of the city to take a full year’s depreciation in the year of acquisition and no depreciation in the year of sale or retirement. It recognizes depreciation on a straight?line basis.1. As budgeted, the city ordered supplies that cost $8 million, received supplies (including those ordered in a prior year) that cost $9 million, paid for supplies that cost $7 million, and used supplies that cost $7.5 million. The city began the year with a supplies inventory that cost $1.5 million.2. In the prior year the city signed a five?year lease of telecommunications equipment. The equipment had a fair?market value of $5 million. In the current year the city made its first required annual rent payment of $1,252,282. This amount reflected an implicit interest rate of 8 percent. The lease qualifies as a capital lease.3. The government of the state in which the city is located is responsible for making 50 percent of the city’s required contribution to a firefighters’ life insurance fund. In the current year the state and the city each contributed $4 million of the required $8 million.4. In December the city transferred $3 million from the general fund to a debt service fund to cover interest on 30?year bonds, which were issued 10 years earlier. Interest of $6 million on the bonds is due each September 30th and March 31st and the $3 million transfer is intended to cover the interest

EX. 5-3i. $300,000 j. $900,000 k. $1,925,000 l. $4,500,000 m. $5,000,000 n. $8,000,000 o. $8,900,000Transactions may have significantly different impacts on a government’s budget, governmental fund state- ments, and government-wide statements.A city prepares its budget on a cash basis. For each of the following indicate the amount (if any) of an expenditure/expense that the city would be recognize in (1) its budget, (2) its fund statements, and (3) its government?wide statements. Provide a brief explanation of your response.When permitted an option, the city uses the purchases method to account for its inventory.It is the policy of the city to take a full year’s depreciation in the year of acquisition and no depreciation in the year of sale or retirement. It recognizes depreciation on a straight?line basis.1. As budgeted, the city ordered supplies that cost $8 million, received supplies (including those ordered in a prior year) that cost $9 million, paid for supplies that cost $7 million, and used supplies that cost $7.5 million. The city began the year with a supplies inventory that cost $1.5 million.2. In the prior year the city signed a five?year lease of telecommunications equipment. The equipment had a fair?market value of $5 million. In the current year the city made its first required annual rent payment of $1,252,282. This amount reflected an implicit interest rate of 8 percent. The lease qualifies as a capital lease.3. The government of the state in which the city is located is responsible for making 50 percent of the city’s required contribution to a firefighters’ life insurance fund. In the current year the state and the city each contributed $4 million of the required $8 million.4. In December the city transferred $3 million from the general fund to a debt service fund to cover interest on 30?year bonds, which were issued 10 years earlier. Interest of $6 million on the bonds is due each September 30th and March 31st and the $3 million transfer is intended to cover the interest