Full directions and template are attached.

Chapter 6 Proprietary Funds

6C. Part 1. Internal Service Fund Transactions

The Stores and Service Fund of the City of Monroe had the following account balances as of January 1, 2015:

Chapter 6 - Proprietary Funds 6-C. Part 1. Internal Service Fund Transactions The Stores and Service Fund of the City of Monroe had the following account balances as of January 1, 2015: Required: a. Open a general journal for the City of Monroe Stores and Service Fund and record the following transactions. (1) A budget was prepared for FY 2015. It was estimated that the price charged other departments for supplies should be 1.25% of cost to achieve the desired breakeven for the year. (2) The amount due from other funds as of January 1, 2015, was collected in full. (3) During the year, supplies were ordered and received in the amount of $303,500. This amount was posted to accounts payable. (4) $15,000 of the advance from the Water Utility Fund, originally provided for construction, was repaid. No interest is charged. (5) During the year, supplies costing $250,560 were issued to the General Fund, and supplies costing $46,400 were issued to the Water Utility Fund. These funds were charged based on the previously determined markup ($ 313,200 to General Fund and 58,000 to the Water Utility Fund). (6) Operating expenses, exclusive of depreciation, were recorded in accounts payable as follows: Purchasing, $15,000; Warehousing, $16,000; Delivery, $17,500; and Administrative, $9,200. (7) Cash was received from the General Fund in the amount of $310,000 and from the Water Utility Fund in the amount of $50,000. (8) Accounts payable were paid in the amount of $355,700. (9) Depreciation in the amount of $11,000 was recorded for buildings and $4,600 for equipment. b. Post the entries to the Stores and Service Fund ledger (t-accounts). c. Prepare and post an entry closing all nominal accounts to Net Assets. Compute the balance in the net asset accounts, assuming there are no Restricted Net Assets. 6-C. 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, 2015, the City of Monroe Water and Sewer Fund had the following account balances: Required: a. Open a general journal for the City of Monroe Water and Sewer Utility Fund and record the following transactions. (1) During the year, sales of water to non-government customers amounted to $1,002,000 and sales of water to the General Fund amounted to $37,000. (2) Collections from non-government customers amounted to $962,000. (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 $257,000 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, $164,900; 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 employer's 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 (612%) in the amount of $162,500 was paid. (8) Interest in the amount of $17,000 (included in 7 above) was reclassified to Construction Work in Progress. (9) Construction projects at the water treatment plant (reflected in the beginning balance of construction in process) were completed in the amount of $203,000, and the assets were placed in service. Payments for these amounts were made in the previous year (no effect on 2015 Statement of Cash Flows). (10) Collection efforts were discontinued on bills totaling $3,020. The unpaid receivables were written off. (11) An analysis of customer receivable balances indicated the Estimated Uncollectible Accounts needed to be increased by $5,500. (12) Payment of accounts payable amounted to $297,900. 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 $275,000. (15) In accord with the revenue bond indenture, $25,000 cash was transferred from operating cash to restricted assets. 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 Assets. Compute the balance in the net asset 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. 6-C. Part 3. Proprietary Fund Financial Statements Required: Prepare, in good form, for the proprietary funds accounted for in Parts 1 and 2, the following: (1) A Statement of Revenues, Expenses, and Changes in Fund Net Assets for the Year Ended December 31, 2015. (2) A Statement of Net Assets, as of December 31, 2015. (3) A Statement of Cash Flows for the Year Ended December 31, 2015. Include restricted assets as a part of cash and cash equivalents for this statement. (Assume any materials and labor attributable to construction in process were paid by year end). City of Monroe Stores Services Internal Service Fund STORES AND SERVICES INTERNAL SERVICE FUND reference Account Titles Debits Credits bb 6-C-1 CASH 31,000 INVENTORY OF SUPPLIES 27,500 bb bb DUE FROM OTHER FUNDS 27,000 bb bb LAND 18,000 1 type debit accounts in this column type credit accounts in this column 31,000 bb 27,500 27,000 ACCUMULATED DEPR' BUILDINGS 33,000 bb BUILDINGS 84,000 84,000 33,000 ACCOUNTS PAYABLE 19,000 bb ADVANCE FROM ENTERPRISE FUND 30,000 19,000 bb 46,000 bb OPERATING EXPENSES COST OF SALES & SERVs - Total Debits Total Credits ACCUMULATED DEPR' EQUIPMENT 25,000 bb EQUIPMENT 46,000 25,000 NET POSITION ( beginning) 126,500 30,000 REVENUES - CHARGES FOR SALES & SERVICES 18,000 bb 126,500 OPERATING EXPENSES ADMINISTRATION 233,500 233,500 - OPERATING EXPENSES DEPRECIATION - City of Monroe - Water and Sewer Enterprise Fund WATER AND SEWER ENTERPRISE FUND CASH reference 6-C-2 Account Titles Debits Credits bb CUSTOMER 105,000 ESTIMATED ACCOUNTS RECEIVABLE 77,000 bb DUE FROM UNCOLLECTIBLE ACCNTS 4,000 bb GENERAL FUND bb 1 type debit accounts in this column type credit accounts in this column 105,000 bb 77,000 MATERIALS & SUPPLIES INVENTORIES 28,000 28,000 bb bb 4,000 ADVANCE TO SUPPLIES AND STORES FUND 30,000 bb 30,000 CONSTRUCTION IN PROCESS 203,000 - bb OPERATING EXPENSES COST OF SALES & SERVs - PAYROLL TAXES PAYABLE - bb 97,000 REVENUE BONDS PAYABLE 2,500,000 bb - 1,200,000 ACCOUNTS PAYABLE 97,000 bb 117,000 DUE TO STORES & SERVICES FUND ACCUMULATED DEPR' - WATER PLANT 1,200,000 bb 4,200,000 RESTRICTED ASSETS 117,000 bb 203,000 WATER TREATMENT PLANT 4,200,000 - NET POSITION ( beginning) 959,000 bb 2,500,000 OPERATING EXPENSES SELLING - REVENUES - CHARGES FOR SALES & SERVICES 959,000 OPERATING EXPENSES ADMINISTRATION - - OPERATING EXPENSES DEPRECIATION - NON- OPERATING EXPENSES INTEREST Total Debits Total Credits 4,760,000 4,760,000 - City of Monroe PROPRIETARY FUNDS- Closing Entries Stores and Services Internal Service Fund Closing Entry Account Title Debits Credits NET POSITION 126,500 Preclosing closing entry 126,500 Water and Sewer Enterprise Fund Closing Entry Account Title Debits Credits NET POSITION 959,000 Preclosing closing entry 959,000 City of Monroe Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary-type Funds For the year ended December 31, 2015 Business-Type Activities Enterprise Funds Water and Sewer Governmental Activities Internal Service Funds Operating Revenues Charges for Services Total Current Assets - - Operating Expenses Cost of Sales and Services Selling Administration Depreciation Total Operating Expenses - - Operting Income - - Nonoperating Expenses Interest Expense Change in Net Position Net Position, January 1 Net Position, December 31 $ - $ - City of Monroe Statement of Net Position Proprietary-type Funds As of December 31, 2015 Business-Type Activities Enterprise Funds Water and Sewer Governmental Activities Internal Service Funds Assets Current Assets Cash Customer Accounts Receivable (Net) Due from Other Funds Inventories Total Current Assets - - Noncurrent Assets Advance to Stores and Services Fund Restricted Assets (Cash) Capital Assets, Net of Accumulated Depreciation Total Noncurrent Assets Total Assets - - Liabilities Current Liabilities Accounts Payable Payroll Taxes Payable Due to Internal Service Fund Total Current Liabilities - - Noncurrent Liabilities Revenue Bonds Payable Advance from Water Utility Fund Total Noncurrent Liabilities Total Liabilities - - Net Position Net Investment in Capital Assets Restricted Unrestricted Total Net Position $ - $