Question

The City of Southern Pines maintains its books so as to prepare fund accounting statements and records worksheet adjustments in order to prepare government-wide statements. As such, the City’s internal service fund, a motor pool fund, is included in the proprietary funds statements.

1. Balance sheet asset accounts include: Cash, $92,000; Investments, $135,400; Due from the General Fund, $16,300; Inventories, $353,000; and Capital Assets (net), $1,042,700. Liability accounts include: Accounts Payable, $54,500; Long-Term Advance from Enterprise Fund, $654,000.
2. The only transaction in the internal service fund that is external to the government is interest revenue in the amount of $3,400.
3. Exclusive of the interest revenue, the internal service fund reported net income in the amount of $54,000. An examination of the records indicates that services were provided as follows: one-third to general government, one-third to public safety, and one-third to public works.

Required:
Prepare necessary adjustments in order to incorporate the internal service fund in the government-wide statements as a part of governmental activities. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Please find below worksheet useful to compute desired results: -

| D 1 Credit A Journal entries 2 Sr. No. Account titles I Cash Investment Due from general fund Inventories Capital Assets Accounts payable Advance from Enterprise fund Net assets Debit $ 92,000.00 S 135.400.00 $ 16,300.00 $ 353,000.00 $ 1,042,700.00 $ 54,500.00 $ 654.000.00 $930.900.00 $ 16,300.00 Due to Internal service fund (general fund) Due from general fund internal service fund) S 16,300.00 $ 3.400.00 2 Net Assets Interest Revenue S 3,400.00 S 54,000.00 3 Net Assets Expenditures-General Govt. Expenditures- Public Safety Expenditures - Public Works S 18,000.00 $ 18,000.00 $ 18,000.00