Washington City created an Information Technology department in 2013 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 5%. The pre-closing trial balance for the IT department as of December 31, 2017 is shown below.

	Debits		Credits
Cash	$	14,500
Due from Other Funds		4,250
Materials and Supplies Inventory		350
Machinery and Equipment		53,600
Accumulated Depreciation					$	30,100
Accounts Payable						2,550
Payroll Taxes Payable						2,650
Due to Other Funds						1,200
Net Position ? Net Investment in Capital Assets						23,500
Net Position ? Unrestricted						12,700
	$	72,700			$	72,700

During the fiscal year ended December 31, 2017, the following transactions (summarized) occurred:

1.	Gross employee wages were $57,600, including the employer?s share of social security taxes amounting to $4,100. Federal income and social security taxes withheld from that amount totaled $18,725.
2.	Office expenses in the amount of $3,700 were paid in cash.
3.	Materials and supplies purchased on account during the year were $8,400.
4.	Received a bill totaling $14,525 for utilities provided by Washington City?s utility fund.
5.	Cash paid to the federal government for payroll taxes was $23,000.
6.	Cash paid to the Utility Fund was $14,500.
7.	Accounts payable at year end totaled $2,950.
8.	Materials and supplies used during the year were $8,250.
9.	Charges to departments during the fiscal year were as follows:

General Fund	$	57,500
Special Revenue Fund		20,600

10.	Unpaid balances at year end were:

General Fund	$	3,500
Special Revenue Fund		1,800

11.	The depreciation for the year was $6,100.
12.	Revenue and expense accounts for the year were closed.

Required

a-1.

Prepare journal entries for the Information Technology Fund for 2017.(If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

1. Gross employee wages were $57,600, including the employer?s share of social security taxes amounting to $4,100. Federal income and social security taxes withheld from that amount totaled $18,725. 2. Office expenses in the amount of $3,700 were paid in cash. 3. Materials and supplies purchased on account during the year were $8,400. 4. Received a bill totaling $14,525 for utilities provided by Washington City?s utility fund. 5. Cash paid to the federal government for payroll taxes was $23,000. 6. Cash paid to the Utility Fund was $14,500. 7. Accounts payable at year end totaled $2,950. 8. Materials and supplies used during the year were $8,250. 9. Record the billing to departments. 10. Record the cash received from other funds. 11. The depreciation for the year was $6,100.

a-2.	Prepare closing entry for the Information Technology Fund for 2017.(If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
	1. Record the closure of revenue and expense accounts. 2. Record the operating loss for the year. 3. Record the transfer of depreciation expense to the asset account.

a-3.	Prepare a statement of revenues, expenses, and changes in net position for the Information Technology Fund for 2017.

b.	Prepare a statement of net position for the Information Technology Fund as of December 31, 2017.

c.

Prepare a statement of cash flows and reconciliation of operating income to net cash provided by operations for the Information Technology Fund as of December 31, 2017.(Negative amounts should be indicated by a minus sign.)

WASHINGTON CITY
Information Technology Fund
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash Flows from Operating Activities:
Cash Received from Customers
Cash Paid To:
0
Net Cash Provided by Operations	$0
Net Decrease in Cash and Cash Equivalents	0
Cash and Cash Equivalents, 01/01/2017
Cash and Cash Equivalents, 12/31/2017	$0
Reconciliation of Operating Income to Net Cash Provided by Operations
Operating Income/(Loss)
Adjustments:
Depreciation Expense?Machinery 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

Karin Sikkink ACTG 415: OnlineOnsite HW10 1. instructions | help value: 4.00 points Washington City created an Information Technology department in 2013 to centralize information technology (IT) functions for the city. The goal of the department was to reduce costs, avoid duplication of efforts, and provide uptodate 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 5%. The preclosing trial balance for the IT department as of December 31, 2017 is shown below. Cash Due from Other Funds Materials and Supplies Inventory Machinery and Equipment Accumulated Depreciation Accounts Payable Payroll Taxes Payable Due to Other Funds Net Position - Net Investment in Capital Assets Net Position - Unrestricted Debits $14,500 4,250 350 53,600 $72,700 Credits $30,100 2,550 2,650 1,200 23,500 12,700 $72,700 During the fiscal year ended December 31, 2017, the following transactions (summarized) occurred: 1. Gross employee wages were $57,600, including the employer's share of social security taxes amounting to $4,100. Federal income and social security taxes withheld from that amount totaled $18,725. 2. Office expenses in the amount of $3,700 were paid in cash. 3. Materials and supplies purchased on account during the year were $8,400. 4. Received a bill totaling $14,525 for utilities provided by Washington City's utility fund. 5. Cash paid to the federal government for payroll taxes was $23,000. 6. Cash paid to the Utility Fund was $14,500. 7. Accounts payable at year end totaled $2,950. 8. Materials and supplies used during the year were $8,250. 9. Charges to departments during the fiscal year were as follows: General Fund $57,500 Special Revenue Fund 20,600 10. 11. 12. Unpaid balances at year end were: General Fund $ 3,500 Special Revenue Fund 1,800 The depreciation for the year was $6,100. Revenue and expense accounts for the year were closed. Required a1. Prepare journal entries for the Information Technology Fund for 2017. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) transaction list view transaction list view general journal Journal Entry Worksheet 1. Gross employee wages were $57,600, including the employer's share of social security taxes amounting to $4,100. Federal income and social security taxes Gross employee wages were $57,600, including the employer's share of withheld from that amount totaled $18,725. social security taxes amounting to $4,100. Federal income and social 2. Office expenses in the amount of $3,700 were paid in security taxes withheld from that amount totaled $18,725. cash. 1 2 3 4 5 6 7 8 9 10 11 Transaction 3. Materials and supplies purchased on account during the Credit General Journal Debit year were $8,400. 1 4. Received a bill totaling $14,525 for utilities provided by Washington City's utility fund. 5. Cash paid to the federal government for payroll taxes was $23,000. 6. Cash paid to the Utility Fund was $14,500. 7. Accounts payable at year end totaled $2,950. *Enter debits before credits 8. Materials and supplies used during the year were $8,250. done clear entry record entry 9. Record the billing to departments. 10. Record the cash received from other funds. 11. The depreciation for the year was $6,100. = journal entry has been entered a2. Prepare closing entry for the Information Technology Fund for 2017. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) transaction list view transaction list view general journal Journal Entry Worksheet 1. Record the closure of revenue and expense accounts. 2. Record the operating loss for the year. 1 2 3 3. Record the transfer of depreciation expense to the asset Record the closure of revenue and expense accounts. account. Transaction General Journal Debit Credit 12(a) = journal entry has been entered *Enter debits before credits done clear entry record entry a3. Prepare a statement of revenues, expenses, and changes in net position for the Information Technology Fund for 2017. WASHINGTON CITY Information Technology Fund Statement of Revenues, Expenses, and Changes in Fund Net Position For the Year Ended December 31, 2017 Billings to Departments Operating Expenses: Total Operating Expenses 0 0 Net Position, January 1, 2017 Net Position, December 31, 2017 $ 0 b. Prepare a statement of net position for the Information Technology Fund as of December 31, 2017. WASHINGTON CITY Information Technology Fund Statement of Net Position As of December 31, 2017 Assets Current Assets: Total Current Assets $ 0 Capital Assets: Total Capital Assets 0 Total Assets 0 Liabilities Total Current Liabilities 0 Net Position Net PositionNet Investment in Capital Assets Net PositionUnrestricted Total Net Position $ 0 c. Prepare a statement of cash flows and reconciliation of operating income to net cash provided by operations for the Information Technology Fund as of December 31, 2017. (Negative amounts should be indicated by a minus sign.) WASHINGTON CITY Information Technology Fund Statement of Cash Flows For the Year Ended December 31, 2017 Cash Flows from Operating Activities: Cash Received from Customers Cash Paid To: 0 Net Cash Provided by Operations $ Net Decrease in Cash and Cash Equivalents 0 0 Cash and Cash Equivalents, 01/01/2017 $ Cash and Cash Equivalents, 12/31/2017 0 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 d. Has the manager of the IT department been able to achieve the goal of recovering costs through user fees? Yes No References eBook & Resources Financial Statements Difficulty: 3 Hard Learning Objective: 0704 Describe accounting procedures and prepare journal entries and financial statements for an internal service fund. Check my work 2016 McGraw-Hill Education. All rights reserved