Question

Newark established an internal service fund for its data processing activities on July \(1,20 \mathrm{X} 8\). During the fiscal year ended June \(30,20 \mathrm{X} 9,\) the following transactions and events occurred:

1) On July \(1,20 \mathrm{X} 8\), the city council authorized the general fund to contribute \(\$ 1,000,000\) to help establish the internal service fund on July \(20,20 \mathrm{X} 8\).

2) The internal service fund spent \(\$ 700,000\) of the contribution to acquire a mainframe computer on July \(25,20 \mathrm{X} 8\).

3) During the year ended June \(30,20 \mathrm{X} 9\), the internal service billed other funds of the city \(\$ 350,000\) for use of the computer, By year end, all of the billings were collected except for \(\$ 50,000\)

4) The internal service fund incurred general operating expenses of \(\$ 120,000,\) exclusive of depreciation, during the year ended June \(30,20 \mathrm{X} 9 .\) All of the expenses were paid by June 30 , \(20 \mathrm{X} 9,\) except for \(\$ 24,000\)

5) Depreciation expense related to the computer was \(\$ 180,000 .\)

6) The Enterprise fund was billed \(\$ 18,000\) for services rendered.