diff --git a/core/chain_makers.go b/core/chain_makers.go
index e7a65748e..4512a5493 100644
--- a/core/chain_makers.go
+++ b/core/chain_makers.go
@@ -64,7 +64,7 @@ func newBlockFromParent(addr common.Address, parent *types.Block) *types.Block {
 	header.Difficulty = CalcDifficulty(block.Header(), parent.Header())
 	header.Number = new(big.Int).Add(parent.Header().Number, common.Big1)
 	header.Time = parent.Header().Time + 10
-	header.GasLimit = CalcGasLimit(parent, block)
+	header.GasLimit = CalcGasLimit(parent)
 
 	block.Td = parent.Td
 
@@ -79,7 +79,7 @@ func makeBlock(bman *BlockProcessor, parent *types.Block, i int, db common.Datab
 	block := newBlockFromParent(addr, parent)
 	state := state.New(block.Root(), db)
 	cbase := state.GetOrNewStateObject(addr)
-	cbase.SetGasPool(CalcGasLimit(parent, block))
+	cbase.SetGasPool(CalcGasLimit(parent))
 	cbase.AddBalance(BlockReward)
 	state.Update()
 	block.SetRoot(state.Root())
diff --git a/core/chain_manager.go b/core/chain_manager.go
index bfe156262..fb2af0280 100644
--- a/core/chain_manager.go
+++ b/core/chain_manager.go
@@ -54,11 +54,7 @@ func CalculateTD(block, parent *types.Block) *big.Int {
 	return td
 }
 
-func CalcGasLimit(parent, block *types.Block) *big.Int {
-	if block.Number().Cmp(big.NewInt(0)) == 0 {
-		return common.BigPow(10, 6)
-	}
-
+func CalcGasLimit(parent *types.Block) *big.Int {
 	// ((1024-1) * parent.gasLimit + (gasUsed * 6 / 5)) / 1024
 	previous := new(big.Int).Mul(big.NewInt(1024-1), parent.GasLimit())
 	current := new(big.Rat).Mul(new(big.Rat).SetInt(parent.GasUsed()), big.NewRat(6, 5))
@@ -277,7 +273,7 @@ func (bc *ChainManager) NewBlock(coinbase common.Address) *types.Block {
 		header := block.Header()
 		header.Difficulty = CalcDifficulty(block.Header(), parent.Header())
 		header.Number = new(big.Int).Add(parent.Header().Number, common.Big1)
-		header.GasLimit = CalcGasLimit(parent, block)
+		header.GasLimit = CalcGasLimit(parent)
 
 	}
 
@@ -658,7 +654,7 @@ out:
 						// We need some control over the mining operation. Acquiring locks and waiting for the miner to create new block takes too long
 						// and in most cases isn't even necessary.
 						if i+1 == ev.canonicalCount {
-							self.currentGasLimit = CalcGasLimit(self.GetBlock(event.Block.ParentHash()), event.Block)
+							self.currentGasLimit = CalcGasLimit(event.Block)
 							self.eventMux.Post(ChainHeadEvent{event.Block})
 						}
 					case ChainSplitEvent:
diff --git a/core/transaction_pool.go b/core/transaction_pool.go
index f6414a882..8543aa017 100644
--- a/core/transaction_pool.go
+++ b/core/transaction_pool.go
@@ -20,8 +20,9 @@ import (
 var (
 	ErrInvalidSender      = errors.New("Invalid sender")
 	ErrNonce              = errors.New("Nonce too low")
+	ErrBalance            = errors.New("Insufficient balance")
 	ErrNonExistentAccount = errors.New("Account does not exist")
-	ErrInsufficientFunds  = errors.New("Insufficient funds")
+	ErrInsufficientFunds  = errors.New("Insufficient funds for gas * price + value")
 	ErrIntrinsicGas       = errors.New("Intrinsic gas too low")
 	ErrGasLimit           = errors.New("Exceeds block gas limit")
 )
@@ -124,7 +125,9 @@ func (pool *TxPool) ValidateTransaction(tx *types.Transaction) error {
 		return ErrGasLimit
 	}
 
-	if pool.currentState().GetBalance(from).Cmp(new(big.Int).Mul(tx.Price, tx.GasLimit)) < 0 {
+	total := new(big.Int).Mul(tx.Price, tx.GasLimit)
+	total.Add(total, tx.Value())
+	if pool.currentState().GetBalance(from).Cmp(total) < 0 {
 		return ErrInsufficientFunds
 	}
 
@@ -193,7 +196,7 @@ func (self *TxPool) AddTransactions(txs []*types.Transaction) {
 
 	for _, tx := range txs {
 		if err := self.add(tx); err != nil {
-			glog.V(logger.Debug).Infoln(err)
+			glog.V(logger.Debug).Infoln("tx error:", err)
 		} else {
 			h := tx.Hash()
 			glog.V(logger.Debug).Infof("tx %x\n", h[:4])
@@ -296,7 +299,6 @@ func (pool *TxPool) checkQueue() {
 
 			pool.addTx(tx)
 		}
-		//pool.queue[address] = txs[i:]
 		// delete the entire queue entry if it's empty. There's no need to keep it
 		if len(pool.queue[address]) == 0 {
 			delete(pool.queue, address)
@@ -308,12 +310,10 @@ func (pool *TxPool) validatePool() {
 	pool.mu.Lock()
 	defer pool.mu.Unlock()
 
-	statedb := pool.currentState()
 	for hash, tx := range pool.txs {
-		from, _ := tx.From()
-		if nonce := statedb.GetNonce(from); nonce > tx.Nonce() {
-			if glog.V(logger.Debug) {
-				glog.Infof("removed tx (%x) from pool due to nonce error. state=%d tx=%d\n", hash[:4], nonce, tx.Nonce())
+		if err := pool.ValidateTransaction(tx); err != nil {
+			if glog.V(logger.Info) {
+				glog.Infof("removed tx (%x) from pool: %v\n", hash[:4], err)
 			}
 
 			delete(pool.txs, hash)
diff --git a/core/transaction_pool_test.go b/core/transaction_pool_test.go
index f96d2b651..4d66776f0 100644
--- a/core/transaction_pool_test.go
+++ b/core/transaction_pool_test.go
@@ -43,10 +43,11 @@ func TestInvalidTransactions(t *testing.T) {
 		t.Error("expected", ErrInsufficientFunds)
 	}
 
-	pool.currentState().AddBalance(from, big.NewInt(100*100))
+	balance := new(big.Int).Add(tx.Value(), new(big.Int).Mul(tx.Gas(), tx.GasPrice()))
+	pool.currentState().AddBalance(from, balance)
 	err = pool.Add(tx)
 	if err != ErrIntrinsicGas {
-		t.Error("expected", ErrIntrinsicGas)
+		t.Error("expected", ErrIntrinsicGas, "got", err)
 	}
 
 	pool.currentState().SetNonce(from, 1)
diff --git a/miner/worker.go b/miner/worker.go
index 19ede3c93..a38b8a5d4 100644
--- a/miner/worker.go
+++ b/miner/worker.go
@@ -236,7 +236,7 @@ func (self *worker) makeCurrent() {
 	}
 
 	parent := self.chain.GetBlock(self.current.block.ParentHash())
-	self.current.coinbase.SetGasPool(core.CalcGasLimit(parent, self.current.block))
+	self.current.coinbase.SetGasPool(core.CalcGasLimit(parent))
 }
 
 func (self *worker) commitNewWork() {