Question
E10-2 (Net Position Components) Using the format at the end of this exercise, indicate the impact that each of the following transactions has on the
E10-2 (Net Position Components) Using the format at the end of this exercise, indicate the impact that each of the following transactions has on the total net position of a proprietary fund and on each net position component. Also, indicate whether the transaction is reported in the statement of revenues, expenses, and changes in fund net position of a proprietary fund. A sample transaction is analyzed for you.
Sample Transaction: Purchase of equipment costing $5,000 with unrestricted cash.
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Sold building with a book value of $150,000 for $225,000 (proceeds not restricted).
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Land costing $500,000 was purchased by issuing a 5-year, 8% note payable for $450,000. The balance ($50,000) was paid from cash restricted for an expansion project.
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Depreciation expense for the year was $200,000.
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Interest expense of $36,000 on the note in transaction 2 was paid from unrestricted resources.
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Bonds payable of $200,000 were repaid from restricted resources, along with $50,000 of interest. The bonds were issued several years earlier to finance capital asset construction.
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A capital grant of $500,000 was received, but no qualifying costs have been incurred.
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$300,000 of the restricted capital grant from transaction 6 was expended for its intended purpose.
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Sales revenues amounted to $1,000,000.
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Interest revenues restricted to the use of the Enterprise Fund, $40,000, were received.
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The cost of materials and supplies used for the year was $75,000.
Net Position | |||||
Transaction Number | Effect on Operating Statement? | Net Investment in Capital Assets | Restricted | Unrestricted | Total |
Sample | None | +$5,000+$5,000 | ($5,000) |
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