The following information is extracted from the General Fund column of a city fund financial statements. Compute the city budgetary cushion. Based on your computation and the textbook discussion of the budgetary cushion rule of thumb, assess the city ability to withstand a potential near term economic contraction.
Fund balance: Nonspendable.......... $ 85,392
Unassigned ................. 423,185
Total fund balance ............... $ 508,577
Revenues: Property taxes ............ $ 12,480,500
Sales taxes .................. 14,325,700
Other revenues ................. 1,683,800
Total revenues ................. $ 28,490,000