Chapter 7 - Homework  Within the government-wide financial statements, the column for Business-type Activities will generally include: Which of the following would most likely be accounted for in an internal service fund?   Under GASB standards, the City of Parkview is required to use an enterprise fund to account for its nature center it

Chapter 7 - Homework

1.  Within the government-wide financial statements, the column for Business-type Activities will generally include:
2. Which of the following would most likely be accounted for in an internal service fund?

3. Under GASB standards, the City of Parkview is required to use an enterprise fund to account for its nature center it.
4. During 2017, the Gateway City government recorded a $15,000 transfer from the General Fund to an internal service fund; a $25,000 transfer from the General Fund to an enterprise fund; a $10,000 transfer from an enterprise fund to an internal service fund, and a $5,000 transfer from an enterprise fund to the General Fund. In the Business-type Activities column of the government-wide financial statements, Gateway City should report:

5. Which of the following events would generally be classified as nonoperating on an enterprise fund’s statement of revenues, expenses, and changes in net position?

6. In reviewing the accounting records of the Transportation Services Fund, an internal service fund of Douglas City, you notice that the fund uses budgetary accounts.  This is mostly likely because:

7. Under GASB standards, which of the following events would be classified as an investing activity on a proprietary fund’s statement of cash flows?

8. An internal service fund used for insurance activities should recognize an expense and a liability when.

9. During the year an enterprise fund purchased $230,000 worth of equipment. The equipment was acquired with a cash down payment of $30,000 and a $200,000 loan. A partial year of depreciation on the equipment was taken in the amount of $23,000. What is the net effect of this transaction on the net position accounts of the enterprise fund?
10. Tinsen Town had the following long-term liabilities at year end:

Revenue bonds to be repaid from tolls collected            

              By the superhighway enterprise fund                       $250,000

     General obligation bonds issued for the Tinsel

             Town water utility, which will service the debt        $200,000

What amount should be recorded as long-term liabilities in the proprietary fund financial statements?

11. Washington City created an Information Technology department in 2013 to centralize information technology (IT) functions for the city. The goal of the department was to reduce costs, avoid duplication of efforts, and provide up-to-date technology to all of the city’s operations. The fund was designed to be self-supporting; that is, all costs are to be recovered through user fees, but any excess of fees over expenses should be less than 5%. The pre-closing trial balance for the IT department as of December 31, 2017 is shown below.

Debits             Credits

Cash                                                                            $14,500

Due from Other Funds                                               4,250

Materials and Supplies Inventory                               350

Machinery and Equipment                                          53,600

Accumulated Depreciation                                                                 $30,100

Accounts Payable                                                                               2,550

Payroll Taxes Payable                                                                         2,650

Due to Other Funds                                                                            1,200

Net Position – Net Investment in Capital Assets                               23,500

Net Position – Unrestricted                                                                12,700

                                                                                    $72,700           $72,700

1. Gross employee wages were $57,600, including the employer’s share of social security taxes amounting to $4,100.  Federal income and social security taxes withheld from that amount totaled $18,725

2. Office expenses in the amount of $3,700 were paid in cash

3. Materials and supplies purchased on account during the year were $8,400

4. Received a bill totaling $14,525 for utilities proved by Washington City’s utility fund.

5. Cash paid to the federal government for payroll taxes was $23,000
6. Cash paid to the Utility Fund was $14,500

7. Accounts payable at year end totaled $2,950

8. Materials and supplies used during the year were $8,250

9. Record the billing to departments

10. Record the cash received from other funds

11. The depreciation for the year was $6,100

a-2.  Prepare closing entry for the Information Fund for 2017.  (If no entry is required for a transaction event, select “No journal Entry required” in the first account field)

1. Record the closure of revenue and expense accounts

2. Record the operating loss for the year

3. Record the transfer of depreciation expense to the asset account.

a-3.  Prepare a statement of revenues, expenses, and changes in net position for the information Technology Fund for 2017.

b. Prepare a statement of net position for the Information Technology Fund as of December 31, 2017.

c. Prepare a statement of cash flows and reconciliation of operating income to net cash provided by operations for the Information Technology Fund as of December 31, 2017.  (Negative amounts should be indicated by a minus sign)

d. Has the manager of the IT department been able to achieve the goal of recovering costs through user fees?

12. The City of Ashville operates an internal service fund to provide garage space and repairs for all city-owned-and-operated vehicles. The Central Garage Fund was established by a contribution of $300,000 from the General Fund on July 1, 2015, at which time the land and building were acquired. The post-closing trial balance at June 30, 2016, was as follows:

                                                                                                                        Debits             Credits

                        Cash                                                                                        $110,000

                        Due from Other Funds                                                           9,000

                        Inventory of Supplies                                                             90,000

                        Land                                                                                        50,000

                        Building                                                                                  250,000

                        Allowance for Depreciation – Building                                                          $20,000

                        Machinery & Equipment                                                         65,000

                        Allowance for Depreciation-Machinery & Equipment                                   12,000

                        Vouchers Payable                                                                                           31,000

                        Net Position-Net Investment in Capital Assets                                              333,000

                        Net Position-Unrestricted                                                       _______          178,000

                                                                                                                        $574,000         $574,000

a-1. Assume all expenses at the government-wide level are charged to the General Government function.  Prepare journal entries to record all of the transactions for this periods in the Central Garage Fund accounts and in the government activities accounts.

1. Supplies were purchased on account for $92,000, the perpetual inventory method is used

2. The cost of supplies used during the year ended June 30, 2017, was $110,000.  A physical count taken as of that date showed materials and supplies on hand totaled $72,000 at cost.

3. Salaries and wages paid to employees totaled $235,000, including related costs.

4. Billings totaling $30,000 were received from the enterprise fund for utility charges.  The Central Garage Fund paid $27,000 of the amount owed.  (At the government-wide level, record the payable amount as Internal Balances)
5. Depreciation of the building was recorded in the amount of $10,000; depreciation of the machinery and equipment amounted to $9,000

6. Record the billings to other departments.

7. Record the dues received from other funds

8. Vouchers payable at June 30, 2017 wer $16,000

a-2. Prepare closing entries for the Central Garage Fund (ignore government-wide closing entry).  (if no entry is required for a transaction/event, select “No journal entry required” in the first account field)

9. For June 30, 2017, closing entries were prepared for the Central Garage Fund (ignore government-wide closing entry)

Internal Service Fund

• • Prepare the closing entry for the expenses

• • Record the operating loss/profit for the year

12. • Record the net change in investment in capital assets
13. b. Prepare a statement of revenues, expenses, and changes in net position for the Central Garage Fund for the period ended June 30, 2017.

14. c. Prepare a statement of net position for the Central Garage Fund as of June 30, 2017.

d.  Where would the information be reported at the governmental activities level?

15.  During 2017, the Town of Falmouth had a number of transactions that affected net position of its town skating rink, which is operated as an enterprise fund.  You are provided with the following information for 2017:

1. The beginning net position balances are: net investment in capital assets, $679,800; restricted, $0; and unrestricted, $1,354,692
2. Net income for the year was $162,759
3. Depreciation expense totaled $54,000
4. A piece of equipment with a carrying value of $26,100 was sold for $25,000
5. Bonds for $500,000 were issued to construct a concession stand at the rink.  At the end of the year, the concession stand was 50% complete, and construction work in progress totaled $248,000.
6. A $15,000 principal payment was made on a capital lease.
7. A new Zamboni ice resurfacing machine was purchased for $250,000.  At the end of the year, a $30,000 note associated with the machine remains outstanding.

Required

Prepare the net position section of Famouth’s 2017 Statement of Net Position.

1. The amount in the Accrued Utility Revenue account was reversed

2. Billings to customers for water usage during fiscal year 2017 totaled $2,982,557; $193,866 of the total was billed to the General Fund

3. Cash in the amount of $260,000 was received.  The cash was for interest earned on investments and $82,000 in accrued interest.

4. Expenses accrued for the period were: management and administration, $360,408; maintenance and distribution, $689,103; and treatment plant, $695,237

5. Cash receipts for customer deposits totaled $2,427
6. Cash collections on customer accounts totaled $2,943,401, of which $209,531 was from the General Fund.

7. Cash payments for the period were as follows:  accounts payable, $1,462,596; interest (which includes the interest payable), $395,917; bond principal, $400,000; machinery and equipment, $583,425; and return of customer deposits, $912.

8. A state grant amounting to $475,000 was received to help pay for new water treatment equipment.

9. Accounts written off as uncollectible totaled $10,013

10. The Utility Fund transferred $800,000 in excess operating income to the General Fund

11. Adjusting entries for the period were recorded as follows: depreciation on buildings was $240,053 and on machinery and equipment was $360,079; the allowance for uncollectible accounts was increased by $14,913; and accrual for unbilled customer receivables was made for $700,000; accrued interest income was $15,849; and accrued interest expense was $61,406.

12. The revenue bond payable account as adjusted by $400,000 to record the current portion of the bond.

a-2.  For fiscal year 2017, prepare closing entries for the Water Utility Fund.  (If no entry is required for a transaction/event, select “No journal entry required” in the first account field)

1. Record the closure of all revenue and expenses account
2. Record the net change in investment in capital assets

17. b. Prepare a statement of revenues, expense, and changes in fund net position for the Water Utility Fund for the year ended June 30, 2017.  (Negative amounts should be indicated by a minus sign)

18. c. Prepare a statement of net position for the Water Utility Fund as of June 30, 2017.

19. Prepare a statement of cash flows for the Water Utility Fund as of June 30, 2017 (Negative amounts should be indicated by a minus sign)