The following information pertains to Park Township’s general fund at December 31, 2005:

align=”left”>

Total assets, including $200,000 of cash

$1,000,000

Total liabilities

600,000

Fund balance—Reserved for encumbrances

100,000

Appropriations do not lapse at year-end. At December 31, 2005, what amount should Park report as unreserved fund balance in its general fund balance sheet?

  1. $200,000
  2. $300,000
  3. $400,000
  4. $500,000