An internal service fund had the following transactions during the year ended Ju

Question

An internal service fund had the following transactions during the year ended June 30, 2009, its first year of existence: (1) Received $1,000,000 contribution from the general fund. (2) Acquired fleet of cars for $950,000, paying cash. (3) Billed departments in other funds $500,000 for using cars. (4) Incurred operating costs, exclusive of depreciation, of $240,000. (5) Depreciation expense amounted to $250,000. Refer to the above information. On the internal service fund's balance sheet on June 30, 2009, total net assets should be reported at:???

Explanation / Answer

Cash (1,000,000-950,000)               =        50,000

Net Car Assets(950,000-250,000)           700,000

Credit sales                                           500,000

                                                            ------------

                                                           1,250,000

Less: Operating cost                            (240,000)

                                                            ---------------

Total net assets                                     $1,010,000

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