Suburban Water Company is owned by Chester County and was established in $2022$ to

provide water service to the borough of West Chester and its surrounding townships. The

Chester County government accounts for Suburban Water Company in an Enterprise Fund.

During $2023,$ Suburban Water Company engaged in the following transactions, all of which

are recorded in the Enterprise Fund.

$1.$ Suburban $($the company$)$ issued $$5,100,000$ of revenue bonds, the proceeds of which are

restricted for the purchase and improvement of plant and equipment.

$2.$ For $$4,800,000,$ Suburban purchased $($and paid cash for$)$ the plant and equipment of the

private water company that previously served the area.

$3.$ Suburban received a $$430,000$ cash contribution from a developer for the sole purpose of

subsidizing the cost of connecting new houses to existing utility lines.

$4.$ Suburban billed customers for $$1\mathrm{.}9$ million, of which it collected $$1\mathrm{.}2$ million.

$5.$ Suburban billed and collected $$390,000$ in tap connection fees from developers. The

actual cost of the hookups $($paid in cash$)$ was $$310,000.$

$6.$ Suburban paid the following operating costs:

$•$ Purchases of water: $$900,000$

$•$ Labor services: $$300,000$

$•$ Interest: $$250,000$

$•$ Supplies: $$200,000$

$7.$ Suburban recognized depreciation on its capital assets, which have a useful life of $10$

years, and no salvage value. The company uses straight line depreciation, and recognizes

a full year of depreciation in the year of acquisition. The company did not acquire any

capital assets in prior years.

Do

a$.$ Using good form, prepare journal entries to record the transactions for $2023.$

b$.$ Using good form, prepare the Statement of Revenues, Expenses, and Changes in Net

Position for the year ending December $31,2023.$ In addition, prepare the Statement of

Net Position at December $31,2023.$ At December $31,2022,$ the county$’$s Enterprise

Fund had the following account balances in its General Ledger:

$•$ Unrestricted Cash $--$ $ $3,500,000$

$•$ Accounts Receivable $--$ $ $1,400,000$

$•$ Unrestricted Net Position $--$ $ $4,900,000$

Include:

$1.$ Journal Entries

$2.$ Any closing or adjusting entries

$3.$ General Ledger in T Account form

$4.$ Financial Statements