Question

2. The Village of Lake George decided to establish an internal service 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:

             

1. 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.
2. During the year equipment was purchased (for cash) in the amount of $ 890,000.
3. During the year, printing supplies costing $120,000 were purchased; all but $30,000 was paid in cash.
4. Billings to departments during the year totaled $ 400,000 at selling price. All but $50,000 was received in cash.
5. The cost of supplies used during the year totaled $73,000;
6. Salaries and wages were $19,000 and utilities were $3,000 (all paid in cash); and
7. Depreciation was charged on equipment, $80,000.
8. The first installment of the advance was repaid.

             

              Required:

1. Prepare journal entries in the general journal of the Village of Lake George Print Shop Fund to reflect the above transactions.
2. Prepare closing entries for the year.
3. Prepare Changes in New Position and Fund Balance Statement

Answer 1

Village of Lake George Journal Enteries Trans. Particulars a. Cash a/c Dr. To Transfers In To Advance from General Fund Debit in $ Credit in $ 1200000 400000 800000 b. Dr. 890000 Equipment a/c To Cash 890000 C. 120000 Supplies Inventory a/c Dr. To Accounts Payable To Cash 30000 110000 d. Cash a/c Dr. Due from Other Funds a/c Dr. To Operating Revenues-Charges for Services 350000 50000 400000 e. Operating Expenses - Cost of Supplies Used a/c Dr. To Supplies Inventory 73000 73000 f. Operating Expenses - Salaries and Wages a/c Operating Expenses - Utilities a/c To Cash Dr. Dr. 19000 3000 22000 8. 80000 Operating Expenses - Depreciation a/c Dr. To Accumulated Depreciation Equipment 80000 h. Dr. 200000 Advance from General Fund a/c To Cash 200000

Dr. Dr. Closing Enteries Trans. Particulars Charges for Services a/c Transfers In a/c To Cost of supplies used To Salaries and wages To Utilities expense To Depreciation expense To Net assets Debit in $ Credit in $ 400000 400000 73000 19000 3000 80000 675000 Statement of Net Assets As at 30.6.2017 Liabilities and Net Assets Net Assets: Invested in Capital Assets Net of Related Debt* Unrestricted** Total Net Assets 210000 415000 625000 Calculations: Equipment 890000 Less: Accumulated Depreciation 80000 810000 Less: Advance From General Fund 600000 210000 Total Net Assets: Contribution Charges for Services Expenses Total Net Assets Less: Invested in Capital Assets of Related Debt (above) Net Assets-Unrestricted 400000 400000 - 175000 625000 210000 415000