however eldorado estimated that its share of the sales taxes would be received in ea 606515

Items 1 and 2 are based on the following:

The merchants of Eldorado City collect a sales tax of 5% on retail sales. The sales taxes are remitted by retailers to the state and distributed by the state to the various governmental units that are within the boundaries of Eldorado City. During the month of June 2005, the state received $50,000 of sales taxes from merchants in Eldorado. As of June 30, 2005, none of the sales taxes had been remitted to Eldorado or to any of the other governments that were within the boundaries of Eldorado. However, Eldorado estimated that its share of the sales taxes would be received in early July 2005, and would be used to pay for expenditures incurred during the year ended June 30, 2005. Eldorado’s fiscal year ends on June 30. Answer both of the questions below using the guidance provided in GASB 33, Accounting and Financial Reporting for Nonexchange Transactions.

From the perspective of Eldorado City, the sales taxes are an example of what type of nonexchange transaction?

1. Imposed.
2. Voluntary.
3. Derived.
4. Government-mandated

On the statement of revenues, expenditures, and changes in fund balance for the year ended June 30, 2005, how should the general fund of Eldorado report its share of the sales taxes that will be received in July 2005?

1. Deferred revenue.
2. Restricted revenue.
3. Revenue.
4. Unreserved fund balance.