Washington City created an Information Technology department four years ago to centralize information technology (IT) functions for the city. The goal of the department was to reduce costs, avoid duplication of efforts, and provide up-to-date technology to all of the city's operations. The fund was designed to be self-supporting; that is, all costs are to be recovered through user fees, but any excess of fees over expenses should be less than 3 percent. The preclosing trial balance for the IT department as of last year, is shown

vvasnington City created an information Technology department four years ago to centralize Information technology (1 1 ) Tunctons for the city. The goal of the department was to reduce costs, avoid duplication of efforts, and provide up-to-date technology to all of the city's operations. The fund was designed to be self-supporting; that is, all costs are to be recovered through user fees, but any excess of fees over expenses should be less than 3 percent. The preclosing trial balance for the IT department as of last year, is shown below. Debits Credits (in thousands) Cash $ 13, 800 Due from Other Funds 4, 200 Materials and Supplies Inventory 370 Machinery and Equipment 52, 900 Accumulated Depreciation $ 30, 000 Accounts Payable 1, 840 Due to Federal Government 2, 660 Due to Other Funds 1, 170 Net Position-Net Investment in Capital Assets 22, 900 Net Position-Unrestricted 12, 700 $ 71, 270 $ 71, 270 During the current fiscal year ended December 31, the following transactions (summarized in thousands of dollars) occurred: 1. Gross employee wages were $57,400, including the employer's share of social security taxes amounting to $4,090. Federal income and social security taxes withheld from that amount totaled $18,690. 2. Office expenses in the amount of $3,720 were paid in cash. 3. Materials and supplies purchased on account during the year were $8,450. 4. A bill totaling $14,620 was received for utilities provided by Washington City's utility fund. 5. Cash paid to the federal government for payroll taxes was $23,100. 6. Cash paid to the Utility Fund was $13,800. 7. Accounts payable at year-end totaled $2,970.7. Accounts payable at year-end totaled $2,970. 8. Materials and supplies used during the year were $8,330. 9. Charges to departments during the scal year were as follows: General Fund $58,000 Special Revenue Fund 20,600 10. Unpaid balances at year-end were: General Fund $3,500 Special Revenue Fund 1,900 r 11. The depreciation for the year was $5,600. 12. Revenue and expense accounts for the year were closed. Required a-l. Prepare journal entries for the Information Technology Fund for the current year ended December 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the rst account field. Enter your answers in thousands of dollars.) No Transaction General Journal Debit Credit A 1 Wage Expense 57,400 X Payroll Tax Expense V 4,090 Due to Federal Government 18,690 X Cash V 42,800 X B 2 Office Expenses V 3,720 Cash 3,720 C 3 Materials and Supplies Inventory 8,450 Accounts Payable V 8,450 D 4 Utility Expense V 14,620 Due to Other Funds V 14,620 E 5 Due to Federal Government V 23, 100 Cash V 23, 100 F 6 Due to Other Funds 13,800 Cash 13,800G 7 Accounts Payable 0 2,970 0 Cash 0 2,970 o l 8 Cost of Materials and Supplies Used 9 8,330 0 Materials and Supplies Inventory 0 8,330 a 9 Due from Other Funds 0 78,600 0 - Billings to Departments 9 78,600 a J 10 Cash 0 Due from Other Funds 0 K 11 Depreciation Expense o 5.600 a Allowance for Depreciation a 5,600 a a-2. Prepare closing entry for the Information Technology Fund for the current year ended December 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the rst account eld. Enter your answers in thousands of dollars.) ' Answer is complete but not entirely correct. A 12(a) Billings to Departments 0 78,600 0 _ Excess of Cost Over Net Billings to departments Wage Expense 0 0 Ofce Expenses o O 0 Utility Expense 14,620 0 Cost of Materials and Supplies Used 8,330 o Depreciation Expense a 5,600 0 Payroll Tax Expense o 4,090 o O 0 B 12(b) Net PositionUnrestricted 15,160 0 Excess of Cost Over Net Billings to departments 15,160 0 Net PositionNet Investment In Capital Assets 5,600 0 Net PositionUnrestricted 5,600 0 33. Prepare a statement of revenues, expenses, and changes in fund net position for the Information Technology Fund for the current year ended December 31. (Enter your answers in thousands of dollars.) 6 Answer is not complete. Billings to Departments 15 78,600 0 Operating Expenses: Wage Expense Ofce Expenses Utility Expense Cost of Materials and Supplies Used 0 8,330 o Depreciation Expense 0 5,600 0 Payroll Tax Expense o 4.090 0 Total Operating Expenses - 93,760 Operating Loss 0 (15,160) Net Position, January 1 Net Position, December 31 $ (15,160) b. Prepare a statement of net position for the Information Technology Fund as of December 31. (Enter your answers in thousands of dollars.) 6 Answer is not complete. Assets Current Assets: Cash Due from Other Funds Materials and Supplies Inventory Total Current Assets $ 0 Capital Assets: Machinery and Equipment Less: Allowance for Depreciation Total Capital Assets Total Assets Liabilities Accounts Payable 0 Due to Federal Government 0 Due to Other Funds 0 Total Current Liabilities 0 Net Position Net PositionNet Investment in Capital Assets Net PositionUnrestricted Total Net Position $ 0 6. Prepare a statement of cash flows for the Information Technology Fund for the current year ended December 31. (Cash outflows should be indicated by a minus sign. Enter your answers in thousands of dollars.) 9 Answer is not complete. Cash Flows from Operating Activities: Cash Received from Customers Cash Paid To: Employees Other Departments Suppliers Federal Government a Net Cash Provided by Operations Net Decrease in Cash and Cash Equivalents Cash and Cash Equivalents, 01/01 Cash and Cash Equivalents, 12/31 Reconciliation of Operating Income to Net Cash Provided by Operations Operating Income/(Loss) Adjustments: Depreciation ExpenseMachinery and Equipment Increase in Inventory Increase in Receivables from Other Funds Increase in Accounts Payable Decrease in Due to Federal Government Increase in Due to Other Funds Net Cash Provided by Operating Activities $ 0