The town of Brittainville has two Enterprise Funds- one for itswater and wastewa

Question

The town of Brittainville has two Enterprise Funds- one for itswater and wastewater operations and another for its cabletelevision operation. The Water and Wastewater Enterprise Fundissued $11,000,000 of 6%, 15-year refunding bonds at par during theyear. It also received a $175,000 federal grant to expand water andwastewater lines to economically depressed residentialneighborhoods. The Cable Enterprise Fund made its annual payment of$1,000,000 to the General Fund to subsidize operations. It also wasthe recipient of a Federal Communications Commission unrestrictedgrant of $100,000.

A. Changes in net assets would not be affected by the debtissuance; the grant would increase changes in net assets.

B. Changes in net assets would be decreased by any costsassociated with issuing the refunding bonds; the grant wouldincrease changes in net assets.

C. Both the refunding transaction and the grant would increasechanges in net assets.

D. Both the refunding transaction and the grant would decreasechanges in net assets.

E. Changes in net assets would not be affected by eithertransaction.

Explanation / Answer

C. Both the refunding transaction and thegrant would increase changes in Net Assets

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