Question

The Following is the June 30, 2019, statement of net position for the City of Bay Lake Water Utility Fund.

CITY OF BAY LAKE
Water Utility Fund
Statement of Fund Net Position
June 30, 2019
	Assets
	Current assets:
	Cash and investments					$	1,774,824
	Accounts receivable (net of $13,365 provision for uncollectible accounts)						306,824
	Accrued utility revenue						499,600
	Due from General Fund						29,288
	Interest receivable						81,936
	Total current assets						2,692,472
	Restricted assets:
	Cash						9,192
	Capital assets:
	Land	$	1,780,753
	Buildings (net of $3,419,635 in accumulated depreciation)		5,213,853
	Machinery and equipment (net of $5,129,385 in accumulated depreciation)		8,487,500
	Total capital assets (net)						15,482,106
	Total Assets						18,183,770
	Liabilities
	Current liabilities:
	Accounts payable		531,977
	Interest payable		131,755
	Current portion of long-term debt		399,000
	Total current liabilities						1,062,732
	Liabilities payable from restricted assets:
	Customer deposits						9,192
	Long-term liabilities:
	Revenue bond payable						11,571,000
	Total Liabilities						12,642,924
	Net Position
	Net investment in capital assets						3,540,210
	Unrestricted						2,000,636
						$	5,540,846

Following is the information of the Water Utility Fund for fiscal year 2020.

1. The amount in the Accrued Utility Revenue account was reversed.
2. Billings to customers for water usage during fiscal year 2020 totaled $2,997,554; $194,841 of the total was billed to the General Fund.
3. Cash in the amount of $261,308 was received. The cash was for interest earned on investments and $82,413 in accrued interest.
4. Expenses accrued for the period were management and administration, $362,220; maintenance and distribution, $692,567; and treatment plant, $698,735.
5. Cash receipts for customer deposits totaled $2,443.
6. Cash collections on customer accounts totaled $2,962,808, of which $210,913 was from the General Fund.
7. Cash payments for the period were as follows: Accounts Payable, $1,472,239; interest (which includes the interest payable), $398,525; bond principal, $399,000; machinery and equipment, $581,971; and return of customer deposits, $907.
8. A state grant amounting to $472,399 was received to help pay for new water treatment equipment.
9. Accounts written off as uncollectible totaled $9,959.
10. The utility fund transferred $795,688 in excess operating income to the General Fund.
11. Adjusting entries for the period were recorded as follows: depreciation on buildings was $238,764 and on machinery and equipment was $358,146; the allowance for uncollectible accounts was increased by $14,835; an accrual for unbilled customer receivables was made for $696,339; accrued interest income was $15,765; and accrued interest expense was $61,084.
12. The Revenue Bond Payable account was adjusted by $399,000 to record the current portion of the bond.
13. Closing entries and necessary adjustments were made to the net position accounts.

Answer 1

City of Bay Lake Water Utility Journal Enteries Debit in $ Credit in $ Trans. Particulars Sales of Water a/c 1 Dr. 499600 To Accrued Utility Revenue 499600 2802713 Accounts Receivable a/c 2. Dr. Due from General Fund a/c 194841 Dr. To Sales of Water 2997554 Cash a/c 261308 3 Dr. To Interest Receivable 261308 Management & Admin a/c 4 Dr. 362220 Management & Distriution a/c Dr. Treatment Plant a/c 692567 Dr. 698735 To Accounts Payable 1753522 Cash Restricted a/c 5 Dr. 2443 To Customer deposits 2443 Cash a/c 2962808 6 Dr. To Accounts Receivable 2751895 To Due from General Fund 210913 Accounts Payable a/c Interest Payable a/c Interest Expense a/c Bonds Payable -current portion a/c Dr. Machinery & Equipment a/c Customer Deposits a/c 7 Dr. 1472239 Dr. 131755 Dr. 266770 399000 Dr. 581971 Dr. 907 To Cash 2851735 To Cash Restricted 907 Cash a/c 472399 Dr. To Capital Grant Contribution 472399 Provision for uncollectable accounts a/c Dr. 9 9959 To Accounts Receivable 9959 Transfers out a/c 795688 10 Dr. To Cash 795688 Depreciation Expense a/c Bad Debt Expense a/c 596910 11 Dr. Dr. 14835 Accrued Revenue a/c Dr. 696339 Interest Receivable a/c Dr. 15765 Interest Expense a/c Dr. 61084 To Accumulated Depreciation Building 238764 To Accumulated Depreciation Machinery & Equip 358146 To Provision for uncollectable Accounts 14835 To Sales of Water 696339 To Interest Income 15765 To Interest Payable 61084 Bonds Payable a/c 399000 12 Dr. To Bonds Payable-current 399000 Sales of water a/c 13 Dr. 3194293 Capital Grant Contribution a/c Interest Income a/c Dr. 472399 277073 Dr. To Management & Admin Expense 362220 To Maint & Dist Expense 692567 To Treatment Plant Expense 698735 To Depcr. Expense 596910 To Interest Expense 327854 To Bad Debt Expense 14835 795688 To Transfers Out To Net Position - Unrestricted 454956