Internal Service Fund Financial Statements
At the beginning of fiscal year 2014, the City of Wooster established a central supplies storehouse to service its several funds. The general fund contributed $26,000,000 (nonrefundable) to aid in the establishment of the supplies storehouse. It was agreed that the storehouse would charge other funds for the purchase price of supplies plus 15%. During the year, the storehouse purchased $22,000,000 of supplies, paid operating expenses of $3,000,000, and billed other funds for $21,275,000. All accounts are settled except $1,200,000 remaining to be collected from the general fund for supplies billed.
Required
Prepare the statement of revenues, expenses, and changes in net position for fiscal 2014, and the statement of net position at the end of fiscal 2014 for the central supplies storehouse.
Ans :
Net position at begining : 0 (As Investment made during the year)
Cost of purchases : 22,000
Operating Exp. : 3,000
operating Revenue : 21,275
Due from General fund : 1,200
(1) Since it is agreed that storehouse will charge other funds for Purchase price + 15%. Hence
Cost of goods sold : operating revenue *100/(100+15)
Placing figures : 21,275*100/115 = 18,500 (cost of goods sold).....................(1)
(2) Inventory : purchases - Cost of goods sold = 22,000-18,500 = 3,500.....................(2)
(3) cash at fiscal year end : Total inflows during the year - Total outflows duriing the year
Cash Sales : Operating Revenue - Due from general fund
21,275 - 1,200 = 20,075
Total inflows : non refundable general fund (Capital Contributions) + Cash Sales = 26,000 + 20,075 = 46,075
Total outflows : Operating Expenses + Purchases = 3,000 + 22,000 = 25,000
Cash at fiscal year end : 46,075 -25,000 = 21,075..............................................................(3)
(4) Operating Expenses including cost of goods sold ; 3,000 + 18,500 = 21,500...............(4)
City of wooster | ||
Central Supplies Storehouse | ||
Statement of revenues, expenses and changes in net position | ||
For the year 2014 | ||
(in thousands) | Currency | Figure |
Operatig Revenue | $ | 21,275 |
Operatig Expense (4) | $ | -21,500 |
Operating Income | $ | -225 |
Capital Contributions | $ | 26,000 |
Change in Net positions | $ | 25,775 |
Total Net position - beginning | $ | 0 |
Total Net position - Ending | $ | 25,775 |
City of wooster | ||
Central Supplies Storehouse | ||
Statement of net position | ||
At Fiscal Year-End 2014 | ||
(in thousands) | Currency | Figure |
Assets | ||
Current Asstes : | ||
Cash (3) | $ | 21,075 |
Due from General Fund | $ | 1,200 |
Inventory (2) | $ | 3,500 |
Total Assets | $ | 25,775 |
Net Position | ||
Unrestricted | $ | 25,775 |
Total Net Position | $ | 25,775 |
Internal Service Fund Financial Statements At the beginning of fiscal year 2014, the City of Wooster...
Question text Internal Service Fund Financial Statements At the beginning of fiscal year 2014, the City of Wooster established a central supplies storehouse to service its several funds. The general fund contributed $26,000,000 (nonrefundable) to aid in the establishment of the supplies storehouse. It was agreed that the storehouse would charge other funds for the purchase price of supplies plus 15%. During the year, the storehouse purchased $22,000,000 of supplies, paid operating expenses of $3,000,000, and billed other funds for...
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