Problem:
Show the impact of this transaction on the fundamental equation of accounting using modified accrual accounting method for Phoenix City.
Phoenix city is entitled to receive unrestricted grants from the state. During the year, grants in the amount of $100,000 were made. The total collections on grants were just $30,000. This 30,000 consisted of $20,000 that the state owed for the previous year and $10,000 for the current year's grant. The state will be paying the balance owed to the city within 15 days after the year ends.