Question

D (40 points) The Village of Lake George decided to establish an internal serviss fund to account for the operations of a Print Shop The Print Shop is to begin operations on July 1, 2016 the first day of the City's fiscal year During the fiscal year ended June 30, 2017 the following transactions occurred (a) The General Fund made a permanent contribution of $400,000 and a long-term advance of $800,000 to the Print Shop Fund The advance is to be repaid by the Print Shop Fund in four equal annual installments, the first installment is due 6/30/2017 The advance is non-interest bearing and is considered issued for the purchases of equipment (b) During the year equipment was purchased (for cash) in the amount of s 890,000 (c) During the year, printing supplies costing $120,000 were purchased, all but 30,000 was paid in cash (d) Billings to departments during the year totaled $ 400,000 at selling price All but $50,000 was received in cash (e) The cost of supplies used during the year totaled $73,000, () Salaries and wages were $19,000 and utilities were $3,000 (all paid in cash). and (g) Depreciation was charged on equipment, $80,000 (h) The first installment of the advance was repaid Required Prepare journal entries in the general journal of the Village of Lake George Print Shop Fund to reflect the above transactions

Answer 1

Journla entries in the books of Village Lake George for the year ending 30.06.17 Particulars Debit (S) Credit ($) Cash A/c Dr To General fund A/c Being permenant contribution made to the village of Lake george Cash A/c Dr To Long term liability A/c Being LONG TERM advance given to the print sho and which is repaid in four equal annual installment , and the advane is non interest bearin Equipment A/c Dr 890000 To Cash A/c Being Equipment purchased for cash 890000 Printing Supplies A/c Dr To Cash A/c To Accounts payable A/c 30000 90000 (Being Printing supplies purchased and only 30000 paid in cash and remaining amount is payable Cash A/c Accounts Receivables A/c Dr 50000 Dr 350000 To Sales A/c 400000 Being Billing to departments at selling price but onl 50000 received in cash

salaries And Wages A/c Utilities A/c (WN 1) WN 1 19000 3000 To cash A/c Being salaries and wages, Utilities were paid in cash Profit & loss A/c To salaries & wages A/c To Utilities A/c 19000 3000 Being Salaries & Wages, Utilities transferred to Profit & Loss Account Depreciation A/c Dr 80000 To Equipment A/c 80000 (Being Depreciation charged on the Equipment) Profit & loss A/c Dr 80000 To Depreciation A/c 80000 (Being Depreciation amount is transferred to Profit & Loss Account Long term Liability A/c Dr To Cash A/c Being Annual installment repaid for the advance received previously as advance fund Supplies Expese A/c Dr 73000 To printing Supplies A/c 73000 Being Cost of supplies used out of printing supplies WN 1: In the given problem, there is no information related to salaries, wages and Utilities payment, i.e monthly payment or annual payment, hence here we assumed that those payments are related to annual payments and entries also passed accordingly