Chapter 07 – Accounting for the Business–type Activities of State and Local Governments
7–16
Debits Credits
9. DUE FROM OTHER FUNDS 78,100
BILLINGS TO DEPARTMENTS 78,100
(4,250 + 78,100 – 5,300)
11. DEPRECIATION EXPENSE 6,100
ALLOWANCE FOR DEPRECIATION 6,100
12. Closing Entries:
BILLINGS TO DEPARTMENTS 78,100
EXCESS OF COST OVER NET BILLINGS TO
DEPARTMENTS 12,075
Chapter 07 – Accounting for the Business–type Activities of State and Local Governments
7–17
WASHINGTON CITY
T- ACCOUNTS FOR INFORMATION TECHNOLOGY FUND
(NOT REQUIRED)
CASH DUE FROM OTHER FUNDS
12–31–16 14,500 (1) 34,775 12–31-2016 4,250 (10) 77,050
(10) 77,050 (2) 3,700 (9) 78,100
12–31–16 350 (8) 8,250 12–31–16 53,600
12–31–16 30,100
(11) 6,100
ACCOUNTS PAYABLE DUE TO FEDERAL GOVERNMENT
(7) 8,000 12–31-16 2,550 (5) 23,000 12–31-16 2,650
Chapter 07 – Accounting for the Business–type Activities of State and Local Governments
7–18
a. WASHINGTON CITY
INFORMATION TECHNOLOGY FUND
STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN FUND NET POSITION
FOR YEAR ENDED DECEMBER 31, 2017
BILLINGS TO DEPARTMENTS $78,100
OPERATING EXPENSES:
WAGE EXPENSE $53,500
Chapter 07 – Accounting for the Business–type Activities of State and Local Governments
7–19
Ch. 7, Solutions, 7-17 (Cont’d)
b. WASHINGTON CITY
INFORMATION TECHNOLOGY FUND
STATEMENT OF NET POSITION
AS OF DECEMBER 31, 2017
ASSETS:
CURRENT ASSETS:
CASH $ 7,575
DUE FROM OTHER FUNDS 5,300
MATERIALS AND SUPPLIES INVENTORY 500
TOTAL CURRENT ASSETS $13,375
Chapter 07 – Accounting for the Business–type Activities of State and Local Governments
7–20
Ch. 7, Solutions, 7-17 (Cont’d)
c. WASHINGTON CITY
INFORMATION TECHNOLOGY FUND
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
CASH RECEIVED FROM CUSTOMERS $77,050
CASH PAID TO:
EMPLOYEES $(34,775)
FEDERAL GOVERNMENT (W/T, FICA) (23,000)
RECONCILIATION OF OPERATING INCOME TO NET CASH
PROVIDED BY OPERATIONS
OPERATING INCOME/(LOSS) $ (12,075)
ADJUSTMENTS:
DEPRECIATION EXPENSE⎯MACHINERY & EQUIPMENT 6,100
Chapter 07 – Accounting for the Business–type Activities of State and Local Governments
7–21
Ch. 7, Solutions, 7-17 (Cont’d)
d. On the basis of the operating statement for the year ended December 31, 2017,
the pricing policy is NOT achieving the goal of covering all operating
General Problem Information: Information Technology Internal Service Fund
Learning Objective: 7-4
Topic: Internal Service Funds
Bloom’s Taxonomy: Apply
Accreditation Skills tag: AACSB: Knowledge Application, AICPA: FN Reporting
Level of Difficulty: Hard
7-18.
CITY OF ASHVILLE
CENTRAL GARAGE FUND
GENERAL JOURNAL
Debits Credits
1. Internal Service Fund & Governmental Activities:
Governmental Activities:
Ch. 7, Solutions, 7-18 (Cont’d)
7–22
3. Internal Service Fund:
SALARIES AND WAGES EXPENSE 235,000
4. Internal Service Fund:
UTILITIES EXPENSE 30,000
5. Internal Service Fund:
DEPRECIATION EXPENSE⎯BUILDING 10,000
DEPRECIATION EXPENSE⎯MACHINERY
AND EQUIPMENT 9,000
Chapter 07 – Accounting for the Business–type Activities of State and Local Governments
7–23
Debits Credits
6. Internal Service Fund:
DUE FROM OTHER FUNDS 397,000
7. Internal Service Fund:
CASH 394,000
8. Internal Service Fund & Governmental Activities:
Chapter 07 – Accounting for the Business–type Activities of State and Local Governments
7–24
Ch. 7, Solutions, 7-18 (Cont’d)
Debits Credits
9. Internal Service Fund:
Closing Entries:
BILLINGS TO DEPARTMENTS 397,000
COST OF SUPPLIES ISSUED 110,000
Chapter 07 – Accounting for the Business–type Activities of State and Local Governments
7–25
Ch. 7, Solutions, 7-18 (Cont’d)
b. CITY OF ASHVILLE
CENTRAL GARAGE FUND
STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN FUND NET POSITION
FOR YEAR ENDED JUNE 30, 2017
BILLINGS TO DEPARTMENTS $397,000
OPERATING EXPENSES:
COST OF SUPPLIES ISSUED $110,000
SALARIES AND WAGES EXPENSE 235,000
Chapter 07 – Accounting for the Business–type Activities of State and Local Governments
7–26
Ch. 7, Solutions, 7-18 (Cont’d)
c. CITY OF ASHVILLE
CENTRAL GARAGE FUND
STATEMENT OF NET POSITION
AS OF JUNE 30, 2017
ASSETS:
CURRENT ASSETS:
CASH $135,000
DUE FROM OTHER FUNDS 12,000
INVENTORY OF SUPPLIES 72,000
TOTAL CURRENT ASSETS $219,000
CAPITAL ASSETS:
Chapter 07 – Accounting for the Business–type Activities of State and Local Governments
7–27
Ch. 7, Solutions, 7-18 (Cont’d)
d. For the government-wide statement of activities, the internal service fund
would be reported as a part of the Governmental Activities column. Since
the only funds served by the Central Garage Fund are governmental
General Problem Information: Central Garage ISF – City of Ashville
Learning Objective: 7-4
Topic: Internal Service Funds
Bloom’s Taxonomy: Apply
Accreditation Skills tag: AACSB: Knowledge Application, AICPA: FN Reporting
Level of Difficulty: Medium
Chapter 07 – Accounting for the Business–type Activities of State and Local Governments
7–28
Ch. 7, Solutions, (Cont’d)
7-19. a. CITY OF SALTWATER BEACH
TRIBUTE AQUATIC CENTER FUND
STATEMENT OF REVENUE, EXPENSES, AND
CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED DECEMBER 31, 2017
OPERATING INCOME:
CHARGES FOR SERVICES $2,040,000
OPERATING EXPENSES:
PERSONNEL EXPENSE $1,034,000
UTILITIES EXPENSE 188,500
Chapter 07 – Accounting for the Business–type Activities of State and Local Governments
7–29
Ch. 7, Solutions, 7-19 (Cont’d)
b. CITY OF SALTWATER BEACH
TRIBUTE AQUATIC CENTER FUND
STATEMENT OF NET POSITION
AS OF DECEMBER 31, 2017
ASSETS:
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 182,240
ACCOUNTS RECEIVABLE 5,225
SUPPLIES 8,225
TOTAL CURRENT ASSETS $ 195,690
RESTRICTED CASH AND CASH EQUIVALENTS 942,000
CAPITAL ASSETS:
Chapter 07 – Accounting for the Business–type Activities of State and Local Governments
7–30
c. CITY OF SALTWATER BEACH
TRIBUTE AQUATIC CENTER FUND
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
CASH RECEIVED FROM CUSTOMERS $2,038,355
CASH PAID TO:
PERSONNEL $(1,038,800)
UTILITIES (185,800)
REPAIRS AND MAINTENANCE (86,225)
RECONCILIATION OF CASH AND CASH EQUIVALENTS TO THE BALANCE
SHEET
END BEGINNING
OF YEAR OF YEAR