Question

REQUIRED: Record the following transaction in journal entry form for Grand County Purchasing and Stores Internal Service Fund.

1. The purchasing and stores fund received a long-term interest free loan from the utility fund in the amount of $250,000. The loan is to be repaid by the purchasing and stores fund in 10 equal annual installments.

2. Utility bills received from the Grand County’s Utility Fund (Enterprise fund) during the

    year amounted to $47,500 were recorded in the Internal Service Fund.

3. The fund purchased supplies costing $314,000. The invoices were received and approved   

     for payment. The perpetual inventory method is used.

4. Charges to departments during the fiscal year for supplies costing $74,400 were

issued to the General Fund and billed at a markup of 30 % on the cost of the supplies issued. The fund uses the perpetual method to account for inventory.

Answer 1

10 Credits Debits 250,000 Account Titles 1 Cash Due from other Funds (To record interest free loan received from the utility fund) 12 250,000 13 14 15 47,500 16 2 Operating Expenses - Utility bills Accounts Payable (To record Utility bills received from Enterprise Fund) 47,500 17 18 19 314,000 20 3 Inventory of Supplies Accounts Payable (To record purchase of Inventory) 314,000 21 22 23 96,720 24 4 General Fund Revenues (To record revenue for supplies issued) 96,720 25 26 27 74,400 28 Operating Expenses - Cost of Sales Inventory of Supplies (To record cost of supplies) 74,400 29