6C. Part 2. Enterprise Fund Transactions The City of Monroe maintains a Water and Sewer Fund to provide utility services to its citizens. As of January 1, 2020, the City of Monroe Water and Sewer Fund had the following account balances:

Cash	$	102,000
Customer Accounts Receivable		80,000
Estimated Uncollectible Accounts Receivable				$	4,500
Materials and Supplies		28,000
Advance to Stores and Services Fund		30,000
Restricted Assets		117,000
Water Treatment Plant in Service		4,200,000
Construction Work in Progress		203,000
Accumulated Depreciation - Water Treatment Plant					1,200,000
Accounts Payable					96,500
Revenue Bonds Payable					2,500,000
Net Position					959,000
Totals	$	4,760,000		$	4,760,000

Required: a. Record the following transactions in the general journal of the City of Monroe Water and Sewer Utility Fund.

(1) During the year, sales of water to non-government customers amounted to $1,025,000 and sales of water to the General Fund amounted to $37,000.

(2) Collections from non-government customers amounted to $983,000.

(3) The Stores and Services Fund repaid $15,000 of the long-term advance to the Water and Sewer Fund.

(4) Materials and supplies in the amount of $261,000 were received. A liability in that amount was recorded.

(5) Materials and supplies were issued and were charged to the following accounts: cost of sales and services, $180,000; selling, $15,000; administration, $18,000; construction work in progress, $50,000.

(6) Payroll costs for the year totaled $416,200 plus $34,200 for the employers share of payroll taxes. Of that amount, $351,900 was paid in cash, and the remainder was withheld for taxes. The $450,400 (416,200 + 34,200) was distributed as follows: cost of sales and services, $265,800; sales, $43,900; administration, $91,400; construction work in progress, $49,300.

(7) Bond interest (6%) in the amount of $162,500 was paid.

(8) In accord with the revenue bond indenture, $25,000 cash was transferred from operating cash to restricted assets.

(9) Construction projects at the water treatment plant (reflected in the beginning balance of construction in process) were completed in the amount of $214,000, and the assets were placed in service. Payments for these amounts were made in the previous year (no effect on 2020 Statement of Cash Flows).

(10) Collection efforts were discontinued on bills totaling $3,500. The unpaid receivables were written off.

(11) An analysis of customer receivable balances indicated the Estimated Uncollectible Accounts needed to be increased by $6,500.

(12) Payment of accounts payable amounted to $332,000. Payments of payroll taxes totaled $95,200.

(13) Supplies transferred from the Stores and Services Fund amounted to $58,000. Cash in the amount of $50,000 was paid to the Stores and Services Fund for supplies.

(14) Depreciation expense for the year was computed to be $267,000.

b. Post the entries to the Water and Sewer Fund ledger (t-accounts).

c. Prepare and post an entry closing all nominal accounts to Net Position. Compute the balance in the Net Position accounts, assuming the only restricted assets are those identified with the bond indenture and the outstanding bonds are associated with the purchase of capital assets.

Journal Entry Worksheet

1. Record the entry for sales of water to non-government customers amounted to $1,025,000 and to the General Fund amounted to $37,000 during the year.

2. Record the entry for collections from non-government customers amounted to $983,000.

3. Record the entry for $15,000 long-term advance to the Water and Sewer Fund.

4. Record the entry for $261,000 materials and supplies received.

5. Record the entry for $180,000 cost of sales and services; $15,000 selling; $18,000 administration and $50,000 construction work in progress.

6. Record the entry for $265,800 cost of sales and services; $43,900 selling; $91,400 administration and $49,300 construction work in progress.

7. Record the entry for $162,500 payment of bond interest at 6%.

8. Record the entry for $25,000 cash transferred from operating cash to restricted assets.

9. Record the entry for $214,000 water treatment plant completed and placed in service.

10. Record the entry for $3,500 write off of unpaid receivables.

11. Record the entry for $6,500 increase in Estimated Uncollectible Accounts.

12. Record the entry for $332,000 Payment of accounts payable and payments of payroll taxes $95,200.

13a. Record the entry for $58,000 of services fund amount.

13b. Record the payment of cash in the amount of $50,000 to the Stores and Services Fund for supplies.

14. Record the entry for $267,000 of depreciation expense.

15. Record the closing entries to determine the net position.

Post the entries to the Water and Sewer Fund ledger (T-accounts).

Cash

Customer Accounts Receivable

Estimated Uncollectible Accounts Receivable

Due from General Fund

Materials & Supplies

Advance to Stores and Services Fund

Water Treatment Plant

Accumulated Depreciation - Water Plant

Construction Work in Progress

Restricted Assets

Accounts Payable

Payroll Taxes Payable

Due to Stores & Services Fund

Revenue Bonds Payable

Net Position (beginning)

Operating Revenues - Charges for Sales & Services

Operating Expenses Cost of Sales & Services

Operating Expenses Selling

Operating Expenses Administration

Operating Expenses Depreciation

Non-operating Expenses Interest

Net Position