Question

The Town of Weston has a Water Utility Fund with the following trial balance as of July 1, 2019, the first day of the fiscal year: Credits Debits $ 333,000 201,800 121,200 253,000 7,004,000 $ 30,300 Cash Customer accounts receivable Allowance for uncollectible accounts Materials and supplies Restricted assets (cash) Utility plant in service Accumulated depreciation-utility plant Construction work in progress Accounts payable Accrued expenses payable Revenue bonds payable Net position Totals 2,603,000 103,000 123,600 77,300 3,503,000 1,678,800 $8,016,000 $8,016,000 During the year ended June 30, 2020, the following transactions and events occurred in the Town of Weston Water Utility Fund: 1. Accrued expenses at July 1 were paid in cash. 2. Billings to nongovernmental customers for water usage for the year amounted to $1,383,000; billings to the General Fund amounted to $110,000. 3. Liabilities for the following were recorded during the year: Materials and supplies Costs of sales and services Administrative expenses Construction work in progress $189,000 363,000 204,000 222,000 4. Materials and supplies were used in the amount of $278,000, all for costs of sales and services. 5. After collection efforts were unsuccessful, $14,200 of old accounts receivable were written off. 6. Accounts receivable collections totaled $1,482,800 from nongovernmental customers and $49,000 from the General Fund. 7. $1,047,800 of accounts payable were paid in cash. 8. One year's interest in the amount of $177,200 was paid. 9. Construction was completed on plant assets costing $253,000; that amount was transferred to Utility Plant in Service. 10. Depreciation was recorded in the amount of $263,100. 11. The Allowance for Uncollectible Accounts was increased by $10,000. 12. As required by the loan agreement, cash in the amount of $103,000 was transferred to Restricted Assets for eventual redemption of the bonds. 13. Accrued expenses, all related to costs of sales and services, amounted to $92,000. 14. Nominal accounts for the year were closed. Required: a. Record the transactions for the year in general journal form. b. Prepare a Statement of Revenues, Expenses, and Changes in Fund Net Position. c. Prepare a Statement of Net Position as of June 30, 2020. d. Prepare a Statement of Cash Flows for the year ended June 30, 2020. Assume all debt and interest are related to capital outlay. Assume the entire construction work in progress liability (see item 3) was paid in entry 7. Include restricted assets as cash and cash equivalents.

Answer 1

Town of Weston Journal Enteries Trans. Particulars i Accrued Expenses a/c To Cash Dr. Debit in $ Credit in $ 77300 77300 Customer Accounts Receivable a/c Dr. Due from Other Funds a/c Dr. To Operating Revenues - Charges for sales and services 1383000 110000 1493000 3 Dr. Materials and Supplies a/c Dr. Operating Expenses - Costs of sales and Services a/c Operating Expenses - administration a/c Dr. Construction Work in Progress a/c To Accounts Payable 189000 363000 204000 222000 978000 Dr. 278000 Operating Expenses - Costs of sales and Services a/c To Materials and Supplies 278000 Dr. 14200 Allowance for Uncollectible a/c To Customer Accounts Receivable 14200 6 1531800 Cash a/c Dr. To Customer Accounts Receivable To Due from Other Funds 1482800 49000 7 Dr. 1047800 Accounts Payable a/c To Cash 1047800 8 Dr. 177200 Non Operating Expense - Interest a/c To Cash 177200 9 Dr. 253000 Utility Plant in Service a/c To Construction Work in Progress 253000 10 Dr. 263100 Operating Expenses - Depreciation a/c To Accum. Depre- of Utility Plant 263100 11 10000 Operating Revenues - Charges for sales and services a/c Dr. To Allowance for Uncollectible 10000 12 Dr. 103000 Restricted assets a/c To Cash 103000 13 Dr. 92000 Operating Expenses - Costs of sales and Services a/c To Accrued expenses 92000 14 1483000 Operating Revenues - Charges for sales and services a/c Dr. To Operating Expenses - Costs of sales and Services To Operating Expenses - administration To Operating Expenses - Depreciation To Non Operating Expenses - Interest To Net Position 733000 204000 263100 177200 105700

1483000 Statement of Revenues, Expenses and Changes In Fund Net Position For the Year ended 30.6.2020 Operating Revenues Charges for Sales and Services Operating Expenses: Cost of Sales and Services 733000 Administration 204000 Depreciation 263100 Total Operating Expenses Operating Income Non Operating Revenues(Expenses) : Interest on Long Term Debt Change in Net Position Net Position 1.7.2019 Net Position 30.6.2020 1200100 282900 -177200 105700 1678800 1784500

Statement of Net Position As at 30.6.2020 Assets Current and Accrued Assets Cash Customer Accounts Receivable Less:Allowance for Uncollectible 459500 87800 -26100 Due from Other Funds Materials and Supplies Total Current and Accrued Assets 61700 61000 32200 614400 Other Property and Investments: Restricted Assets 356000 7257000 -2866100 Utility Plant: Utility Plant in Service Less:Accumulated Depreciation Utility Plant Net Construction Work in Progress Net Utility Plant Total Assets 4390900 72000 4462900 5433300 53800 92000 145800 Liabilities Current Liabilities Accounts Payable Accrued Expenses Total Current Liabilities Long Term Debt: Revenue Bonds Payable Total Liabilities Net Position: Net Investment in Capital Assets Restricted Restricted Unrestricted Total Net Position 3503000 3648800 959900 356000 468600 1784500 Net investment in capital assetRestricted Unrestricted Total 4462900 -3503000 Invested in Capital Assets net of Debt Capital Assets (net) Less Revenue Bond Payable Restricted Unrestricted (plug) Total Net position 356000 4462900 -3503000 356000 468600 1784500 468600 468600 959900 356000