Are the T Accounts listed on page 4 in the correct columns?

7-3 Central Duplicating Internal Service Fund. As of September 30, 2010, the Central Duplicating Fund of the Town of Fredericksburg had the following post-closing trial balance: During the fiscal year ended September 30, 2011, the following transactions (summarized) occurred: 1. Employees were paid $290,000 wages in cash; additional wages of $43,500 were withheld for federal income and social security taxes. The employer's share of social security taxes amounted to $23,375. 2. Cash remitted to the federal government during the year for withholding taxes and social security taxes amounted to $65,500. 3. Utility bills received from the Town of Fredericksburg's Utility Fund during the year amounted to $23,500. 4. Office expenses paid in cash during the year amounted to $10,500. 5. Service supplies purchased on account during the year totaled $157,500. 6. Parts and supplies used during the year totaled $152,300 (at cost). 7. Charges to departments during the fiscal year were as follows: 1 8. Unpaid balances at year-end were as follows: 9. Payments to the Utility Fund totaled $21,800. 10. Accounts Payable at year-end amounted to $13,250. 11. Annual depreciation rate for machinery and equipment is 10 percent. 12. Revenue and expense accounts for the year were closed. Required a. Prepare a statement of revenues, expenses, and changes in net assets for the year. b. Comment on the evident success of the pricing policy of this fund, assuming that user charges are intended to cover all operating expenses, including depreciation, but are not expected to provide a net income in excess of 3 percent of billings to departments. c. Prepare a statement of net assets for the Central Duplicating Fund as of September 30, 2011. d. Prepare a statement of cash flows for the Central Duplicating Fund for the year ended September 30, 2011. 2 Town of Fredericksburg Central Duplicating Fund General Journal (Not Required) 1 Wage Expense Payroll Tax Expense Cash Due to Federal Government 2 Due to Federal Government Cash 3 Utility Expense Due to Other Funds 4 Office Expense Cash 5 Service Supplies Inventory Accounts Payable 6 Cost of Parts and Supplies Used Service Supplies Inventory 7 Due From Other Funds Billing to Departments 8 Cash Due From Other Funds (20,200 + 588,000 - 30,000) 9 Due to Other Funds Cash 10 Accounts Payable Cash (12,700 + 157,500 - 13,250) 11 Depreciation of Machinery and Equipment Allowance for Depreciation 12 Closing Entries Billing to Department Wage Expense Payroll Tax Expense Utility Expense Office Expenses Cost of Parts and Supplies Depreciation of Machinery and Equipment Operating Income Operating Income Net Assets-Unrestricted Net Assets-Invested in Capital Assets Net Assets-Unrestricted 3 Debits 333,500 23,375 Credits 290,000 66,875 65,500 65,500 23,500 23,500 10,500 10,500 157,500 157,500 152,300 152,300 588,000 588,000 578,200 578,200 21,800 21,800 156,950 156,950 30,000 30,000 588,000 333,500 23,375 23,500 10,500 152,300 30,000 14,825 14,825 14,825 30,000 30,000 Town of Fredericksburg T-Accounts Central Duplicating Fund (Not Required) Cash 9/30/201 0 Due From Other Fund 15,000 578,200 (8) (1) (2) (4) (9) (10) 290,000 9/30/201 0 (7) 10,500 21,800 156,950 Service Supplies Inventory 9/30/201 0 (5) 35,300 157,500 (6) 20,200 588,000 (8) 578,200 Machinery and Equipment 152,300 9/30/201 0 35,300 Allowance for Depreciation Machinery and Equipment 9/30/201 0 90,000 30,000 (11) (10) Accounts Payable 156,950 9/30/2010) (5) Due to Federal Government 65,500 9/30/2010 (1) 1,500 66,875 (9) Due To Other Funds 21,800 9/30/2010) (3) 800 23,500 Net Asses-Unrestricted 9/30/2010 CL CL 55,500 14,825 30,000 Net Assets - Invested in Capital Assets CL 30,000 9/30/2010 210,000 CL Billing to Departments 588,000 (7) 588,000 (1) Payroll Tax Expenses 152,300 CL 152,300 (1) (3) Wage Expense 333,500 CL) Utility Expense 23,500 CL 12,700 157,500 333,500 23,500 4 (2) (6) Cost of Parts and Supplies Used 65,500 9/30/2010 1,500 Depreciation of Machinery & Equipment (11) 30,000 CL 30,000 (4) Operating Income CL 14,825 CL Office Expense 10,500 CL 10,500 14,825 a) Town of Fredericksburg Central Duplicating Fund Statement of Revenues, Expenses, and Changes in Fund Net Assets For Year Ended September 30, 2011 Debits Credits Billings to Department 588,000 Operating Expenses: Wage Expenses 333,500 Payroll Tax Expense 23,375 Office Expenses 10,500 Utility Expenses 23,500 Parts and Supplies Used 152,300 Deprecation of Machinery and Equipment 30,000 Total Operating Expenses 573,175 Operating Income 14,825 Net Assets October 1, 2010 265,500 Net Assets September 30, 2011 280,325 b) On the basis of the operating statement for the year ended September 30, 2011, the pricing policy is achieving the goal of covering all operating expenses, including depreciation. The net income for the year is 2.52 percent of billings to departments, under the three (3) percent maximum set for this fund. 5 c) Town of Fredericksburg Central Duplicating Fund Statement of Net Assets As of September 30, 2011 Debits Assets Current Assets Cash Due from Other Funds Service Supplies Inventory Total Current Assets Capital Assets Machinery and Equipment Less: Allowance for Depreciation Total Capital Assets Total Assets Liabilities Accounts Payable Due to Federal Government Due to Other Funds Total Current Liabilities Credits 48,450 30,000 40,5000 118,950 300,000 120,000 180,000 298,950 13,250 2,875 2,500 18,625 6 7-8 Enterprise Fund Journal Entries and Financial Statements. Following is the June 30, 2010, statement of net assets for the City of Bay Lake Water Utility Fund. 7 8 Required a. For fiscal year 2011, prepare general journal entries for the Water Utility Fund using the following information. (1) The amount in the Accrued Utility Revenue account was reversed. (2) Billings to customers for water usage during fiscal year 2011 totaled $2,982,557; $193,866 of the total was billed to the General Fund. (3) Cash in the amount of $260,000 was received. The cash was for interest earned on investments and $82,000 in accrued interest. (4) Expenses accrued for the period were: management and administration, $360,408; maintenance and distribution, $689,103; and treatment plant, $695,237. (5) Cash receipts for customer deposits totaled $2,427. (6) Cash collections on customer accounts totaled $2,943,401, of which $209,531 was from the General Fund. (7) Cash payments for the period were as follows: Accounts Payable, $1,462,596; interest (which includes the accrued interest payable), $395,917; bond principal, $400,000; machinery and equipment, $583,425; and return of customer deposits, $912. (8) A state grant amounting to $475,000 was received to help pay for new water treatment equipment. (9) Accounts written off as uncollectible totaled $10,013. (10) The utility fund transferred $800,000 in excess operating income to the General Fund. (11) Adjusting entries for the period were recorded as follows: depreciation on buildings was $240,053 and on machinery and equipment it was $360,079; the allowance for uncollectible accounts was increased by $14,913; an accrual for unbilled customer receivables was made for $700,000; accrued interest income was $15,849; and accrued interest expense was $61,406. (12) The Revenue Bond Payable account was adjusted by $400,000 to record the current portion of the bond. (13) Closing entries and necessary adjustments were made to the net asset accounts. b. Prepare a statement of revenues, expenses, and changes in fund net assets for the Water Utility Fund for the year ended June 30, 2011. c. Prepare a statement of net assets for the Water Utility Fund as of June 30, 2011. 9 d. Prepare a statement of cash flows for the Water Utility Fund as of June 30, 2011. 10