The town of Brittainville has two Enterprise Fundsone for its water and wastewater operations and another for
Question:
The town of Brittainville has two Enterprise Funds—one for its water and wastewater operations and another for its cable television operation. The Water and Wastewater Enterprise Fund issued $11,000,000 of 6%, 15-year refunding bonds at par during the year. It also received a $175,000 federal grant to expand water and wastewater lines to economically depressed residential neighborhoods. The Cable Enterprise Fund made its annual payment of $1,000,000 to the General Fund to subsidize operations. It also was the recipient of a Federal Communications Commission unrestricted grant of $100,000.
How will the interfund payment be reported on the Cable Enterprise Fund's operating statement?
a. Transfer out of $1,000,000.
b. Operating expense of $1,000,000.
c. Nonoperating expense of $1,000,000.
d. Capital contribution out of $1,000,000.
e. None of the above-the transaction is not reported on the operating statement, but as a direct reduction of equity on the statement of net assets.
Step by Step Answer:
Governmental And Nonprofit Accounting Theory And Practice
ISBN: 9780132552721
9th Edition
Authors: Robert J Freeman, Craig D Shoulders, Gregory S Allison, Terry K Patton, Robert Smith,