Question

The Town of Weston has a Water Utility Fund with the following trial balance as of July 1, 2016, the first day of the fiscal year:

	Debits			Credits
Cash	$	338,000
Customer accounts receivable		204,800
Allowance for uncollectible accounts				$	30,800
Materials and supplies		123,200
Restricted assets (cash)		256,000
Utility plant in service		7,009,000
Accumulated depreciation—utility plant					2,609,000
Construction work in progress		108,000
Accounts payable					129,600
Accrued expenses payable					81,100
Revenue bonds payable					3,509,000
Net position					1,679,500
Totals	$	8,039,000		$	8,039,000

During the year ended June 30, 2017, 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 $1,387,000; billings to the General Fund amounted to $114,000.
3. Liabilities for the following were recorded during the year:

Materials and supplies	$	194,000
Costs of sales and services		368,000
Administrative expenses		207,000
Construction work in progress		226,000

4. Materials and supplies were used in the amount of $284,000, all for costs of sales and services.
5. $14,500 of old accounts receivable were written off.
6. Accounts receivable collections totaled $1,514,000 from nongovernmental customers and $49,900 from the General Fund.
7. $1,067,000 of accounts payable were paid in cash.
8. One year’s interest in the amount of $180,500 was paid.
9. Construction was completed on plant assets costing $256,000; that amount was transferred to Utility Plant in Service.
10. Depreciation was recorded in the amount of $266,100.
11. Interest in the amount of $25,600 was reclassified to Construction Work in Progress. (This was previously paid in item 8.)
12. The Allowance for Uncollectible Accounts was increased by $10,000.
13. As required by the loan agreement, cash in the amount of $108,000 was transferred to Restricted Assets for eventual redemption of the bonds.
14. Accrued expenses, all related to costs of sales and services, amounted to $97,000.
15. Nominal accounts for the year were closed.

Required:
Prepare a Statement of Cash Flows for the year ended June 30, 2017. 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

Statement of Cash Flow
Cash flow from operating activities:
Cash received from customers			$ 1,563,900
Cash paid to suppliers and employee	1067000+81100-226000		$   -922,100
Net cash provided by operating activities			$     641,800
Cash flow from capital and related financing activities:
Interst paid on long term debt			$   -180,500
Construction of fixed assets			$   -226,000
Net Cash used for capital and related financing acti:			$   -406,500
Net increase in cash and cash equivalents			$     235,300
Beginning cash and cash equivalents			$     594,000
Ending cash and cash equivalents			$     829,300	$                -