Question
Kaui County has operated a popular oceanside municipal golf course for more than 30 years. Local patrons as well as tourists enjoy reasonable rates ina
Kaui County has operated a popular oceanside municipal golf course for more than 30 years. Local patrons as well as tourists enjoy reasonable rates ina picturesque setting. Ten years ago, the course was quite profitable, so the county created an enterprise fund and moved accounting for the golf operations from the General Fund to the new enterprise fund. Over the years, however, course usage has declined and costs have increased. During the current year, the course suffered a $650,798 shortfall that had to be covered by the county's General Fund. In the upcoming fiscal year, the county projects the shortfall to be more than $1 million. Many have criticized the county for injecting money into a business that should be funded primarily through user charges. Supporters of the golf course note that the municipal course is part of the county's Parks & Recreation Department, which benefits the entire community; hence, county support of the course is warranted. Required
a. Is the Kaui County golf course required to be accounted for as an enterprise fund? What are the accounting implications of operating the golf course as part of a General Fund department rather than an enterprise fund activity?
(5) Modify the Golf Course. Are there other uses for the golf facility and the land?
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