Problem 3: enterprise fund financial statement questions

Additional information:

• A transfer of $400,000 was received from the general fund in January, 2021, and was used to acquire land and make land improvements.

• General obligation bonds with a face value of $800,000 were sold for $800,000 on March 31, 2021. The bonds pay interest at 5% on March 31 and September 30. The bonds were used to acquire the building and the buses.

• The bond covenant requires that Summerville set aside assets each year to repay the bond principal as it matures and is paid. During 2021, the City transferred $35,000 of cash to restricted assets. All $35,000 was used to acquire investments in 10-year treasury bonds. The revenue bonds are serial bonds, and the first serial payment of $300,000 is scheduled for March 31, 2024.

• All the charges for services as well as the dividend and interest income from investments were received in cash during 2021.

• Salaries paid during 2021 amounted to $105,000, while $35,000 was paid for fuel and supplies. During 2021, $80,000 of fuel and supplies were purchased on account. $20,000 of the fuel and supplies were unused at December 31, 2021. The unused fuel and supplies are expected to be used in early 2022. There were no unpaid utility bills outstanding at December 31, 2021.

• The investments in equity securities are expected to be sold as working capital is needed in 2022.

• During 2021, the City borrowed $15,000 from the local bank to provide additional working capital for bus operations. The note is due on March 31, 2022. Interest accrued up to December 31, 2021 of $500 was paid on December 31, 2021, and is included in the amount recorded for interest expense of $30,500. The remaining $30,000 of interest expense relates to the revenue bonds.

Required:

1. Prepare, in good form, the statement of revenues, expenses, and changes in net position for the year ended December 31, 2021.