11. On Jan. 1, 2020, the city of Hill created a central motor pool. The following 2020 events and transactions related to this motor pool:

(a) A 2020 budget calling for $80,000 of internal revenues, $5,000 of external revenues, $65,000 of external operating expenses, and $12,000 of internal operating expenses was approved.

(b) The General Fund contributed $120,000 to this internal service fund and made a longterm advance of $50,000 to this fund.

(c) Machinery was ordered at an expected cost of $100,000, and materials and supplies were ordered at an expected cost of $40,000.

(d) Equipment costing $30,000 was received as part of a capital grant. This internal service fund may not charge its customers for the cost of this equipment. This equipment has an estimated life of five years with no estimated residual value.

(e) The machinery ordered in (c) arrived at a cost of $98,000. This machinery has an estimated life of ten years with an estimated residual value of $8,000.

(f) The inventory ordered in (c) arrived at a cost of $42,000, which was paid in cash

(g) Billings for 2000 totaled $109,000 which included the following:

(1) Billings to the General Fund . $86,000

(2) Billings to an Enterprise Fund 19,000

(3) External billings 4,000

(h) Cash of $15,000 was received from the General Fund. The General Fund had received a total of $100,000 cash from an external source, $15,000 of which was earmarked for this Internal Service Fund. Onethird of this $15,000 may be spent in 2020; the other two thirds may be spent equally in 2021 and 2022.

(i) The following operating expenses were approved for payment to outside sources and were paid:

(1) Salaries $55,000

(2) Phone Service 8,000

(j) A bill for $3,600 was received from a Power Enterprise Fund; a bill for $1,900 was received from a Water & Gas Enterprise Fund.

(k) The machinery acquired in (e) above was paid in full.

(l) The following cash collections were made:

(1) From the General Fund $82, 000

(2) From an Enterprise Fund 17,000

(3) From external customers 3,000

(m) A payment of $3,300 was made to the Power Enterprise Fund; a payment of $1,900 was made to the Water & Gas Enterprise Fund.

(n) Materials and supplies were ordered at an expected cost of $12,000.

Additional Information:

(1) The central motor pool uses straightline depreciation, taking a half-year's depreciation in the year of acquisition and the year of disposal.

(2) A physical count of materials and supplies inventory on hand on Dec. 31, 2020, revealed $8,000 of inventory on hand.

Required:

(a) Make the necessary entries for this internal service fund for items (a) through (n) above.

(b) Why can this internal service fund get away with not depreciating its fixed assets to and from the specific date of acquisition and disposal?

(c) Make the necessary Dec. 31, 2020 adjustingclosing entries related to the outstanding yearend purchase order.

(d) Make any other necessary Dec. 31, 2020 adjusting entries related to this internal service fund.

(e) Make any necessary Dec. 31, 2020 closing entries.

(f) Prepare a Statement of Revenues, Expenses, and Changes in Net Position for 2020 for this internal service fund.

(g) Prepare a Dec. 31, 2020 Statement of Net Position for this internal service fund.

(h) What financial statement is required for this internal service that you did not prepare?