As of July 1, 2017, the Village of Boiling Springs decided to purchase a private
ID: 2341757 • Letter: A
Question
As of July 1, 2017, the Village of Boiling Springs decided to purchase a privately operated swimming pool and to create a swimming pool (enterprise) fund. During the year, the following transactions occurred:
A permanent contribution of $600,000 was received from the general fund.
Revenue bonds were sold at par in the amount of $1,200,000.
Several items were purchased for cash, with a cost breakdown as follows: land, $300,000; building, $400,000, land improvement, $400,000; equipment, $200,000; and supplies, $150,000.
Charges for services amounted to $600,000, all received in cash.
Cash expenses included salaries of $200,000; utilities of $100,000; and interest of $72,000.
Supplies were consumed in the amount of $120,000.
Depreciation was recorded as follows: building, $20,000, land improvement, $20,000; and equipment, $20,000.
The books were closed. Close all accounts to net position.
Required:
Record the above transactions in general journal form (on the books of the swimming pool fund) using the template in this module.
Explanation / Answer
Village of Boiling Springs
SWIMMING POOL FUND
General Journal
S.No Account title and explanation Debit Credit
1. Cash $600000 Transfers In(from general Fund) $600000 (being funds transferred from GF)
2. Cash $1200000 Revenue Bonds Payable $1200000 (Being Revenue bonds sold at par)
3. Land $300000 Building $400000 Land improvement $400000 Equipment $200000 Supplies $150000 Cash $1450000 (Being sevaral items purchased for cash)
4. Cash $600000 Operating revenue - Charges for services $600000 (Received Charges for services) 5. Operating expense-Salary $200000 Operating expense-utilities $100000 Non Operating expense- Interest $72000 Cash $372000 (Being operating and non Operating expenses paid)
6. Operating expense-Supplies $120000 Supplies $120000 (Being Supplies consumed)
7. Operating expense- Depreciation $60000 Accumulated Depreciation - Buliding $20000 Accumulated Depreciation - land improvement $20000 Accumulated Depreciation-Equipment $20000 (being depreciation of assets recorded)
8. Operating Revenues- Charges for services
$600000 Transfers In(from General Fund)
$600000 Operating Expense - Salaries
$200000 Operating Expense - Utilities
$100000 Non Operating Expense - Interest
$72000 Operating Expense - Supplies
$120000 Operating Expense - Depreciation
$60000 Net Assets
$648000 (to close all accounts to net position.)
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