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:

	Debits			Credits
Cash	$	349,000
Customer accounts receivable		211,400
Allowance for uncollectible accounts				$	31,900
Materials and supplies		132,000
Restricted assets (cash)		267,000
Utility plant in service		7,031,000
Accumulated depreciation—utility plant					2,631,000
Construction work in progress		119,000
Accounts payable					142,800
Accrued expenses payable					98,500
Revenue bonds payable					3,531,000
Net position					1,674,200
Totals	$	8,109,400		$	8,109,400

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 $1,466,000; billings to the General Fund amounted to $125,000.
3. Liabilities for the following were recorded during the year:

Materials and supplies	$	216,000
Costs of sales and services		390,000
Administrative expenses		218,000
Construction work in progress		237,000

4. Materials and supplies were used in the amount of $300,000, all for costs of sales and services.
5. After collection efforts were unsuccessful, $15,600 of old accounts receivable were written off.
6. Accounts receivable collections totaled $1,570,000 from nongovernmental customers and $53,200 from the General Fund.
7. $1,137,400 of accounts payable were paid in cash.
8. One year’s interest in the amount of $192,600 was paid.
9. Construction was completed on plant assets costing $267,000; that amount was transferred to Utility Plant in Service.
10. Depreciation was recorded in the amount of $277,100.
11. The Allowance for Uncollectible Accounts was increased by $11,000.
12. As required by the loan agreement, cash in the amount of $119,000 was transferred to Restricted Assets for eventual redemption of the bonds.
13. Accrued expenses, all related to costs of sales and services, amounted to $119,000.
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 $ 98500 98500 Customer Accounts Receivable a/c Dr. Due from Other Funds a/c Dr. To Operating Revenues - Charges for sales and services 1466000 125000 1591000 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 216000 390000 218000 237000 1061000 4 Dr. 300000 Operating Expenses - Costs of sales and Services a/c To Materials and Supplies 300000 Dr. 15600 Allowance for Uncollectible a/c To Customer Accounts Receivable 15600 6 1623200 Cash a/c Dr. To Customer Accounts Receivable To Due from Other Funds 1570000 53200 7 Dr. 1137400 Accounts Payable a/c To Cash 1137400 8 Dr. 192600 Non Operating Expense - Interest a/c To Cash 192600 9 Dr. 267000 Utility Plant in Service a/c To Construction Work in Progress 267000 10 Dr. 277100 Operating Expenses - Depreciation a/c To Accum. Depre- of Utility Plant 277100 11 11000 Operating Revenues - Charges for sales and services a/c Dr. To Allowance for Uncollectible 11000 12 Dr. 119000 Restricted assets a/c To Cash 119000 13 Dr. 119000 Operating Expenses - Costs of sales and Services a/c To Accrued expenses 119000 14 1580000 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 809000 218000 277100 192600 83300

1580000 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 809000 Administration 218000 Depreciation 277100 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 1304100 275900 - 192600 83300 1674200 1757500

Statement of Net Position As at 30.6.2020 Assets Current and Accrued Assets Cash Customer Accounts Receivable Less:Allowance for Uncollectible 424700 91800 -27300 Due from Other Funds Materials and Supplies Total Current and Accrued Assets 64500 71800 48000 609000 Other Property and Investments: Restricted Assets 386000 7298000 -2908100 Utility Plant: Utility Plant in Service Less:Accumulated Depreciation Utility Plant Net Construction Work in Progress Net Utility Plant Total Assets 4389900 89000 4478900 5473900 66400 119000 185400 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 3531000 3716400 947900 386000 423600 1757500 Net investment in capital assetRestricted Unrestricted Total 4478900 -3531000 Invested in Capital Assets net of Debt Capital Assets (net) Less Revenue Bond Payable Restricted Unrestricted (plug) Total Net position 386000 4478900 -3531000 386000 423600 1757500 423600 423600 947900 386000