Washington City created an Information Technology department in 2013 to centrali

Question

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 Credits Debits $13,700 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 3,810 320 52,200 $29,300 1,470 2,590 1,170 22,900 12,600 $70,030 $70,030 During the fiscal year ended December 31, 2017, the following transactions (summarized) occurred 1. Gross employee wages were $55,100, including the employer's share of social security taxes amounting to $3,930. Federal income and social security taxes withheld from that amount totaled $17,960 2. Office expenses in the amount of $3,560 were paid in cash 3. Materials and supplies purchased on account during the year were $8,060 4. Received a bill totaling $13,930 for utilities provided by Washington City's utility fund 5. Cash paid to the federal government for payroll taxes was $22,200 6. Cash paid to the Utility Fund was $13,700 7. Accounts payable at year end totaled $2,830 8. Materials and supplies used during the year were $7,910 9. Charges to departments during the fiscal year were as follows General Fund Special Revenue Fund $55,200 19,900 10. Unpaid balances at year end were General Fund Special Revenue Fund $3,500 1,900 11. 12. The depreciation for the year was $6,200 Revenue and expense accounts for the year were closed

Explanation / Answer

a1- Journal entries- All entries are mentioned including the correct entries No Particulars Debit Credit 1 Wage expense 51170 Payroll tax 3930 Due to Federal Govt 17960 Due to Federal Govt 3930 Cash 33210 2 Office expense 3560 Cash 3560 3 Material & Supply inventory 8060 Accounts Payable 8060 4 Utilitiy expense 13930 Due to Funds 13930 5 Due to Federal Govt 22200 Cash 22200 6 Due to Funds 13700 Cash 13700 7 Accounts Payable 6700 Cash 6700 8 Cost of Material Supplie used 7910 Material & Supply inventory 7910 9 Due from Other funds 75100 Billing to department 75100 10 Cash 73510 Due from Other Funds 73510 11 Depreciation Expenses 6200 Allowance for Depreciation 6200 a2- Closing entry for information technology fund 12(a) Billing to Department 75100 Excess of Cost over Net billing to Dept 11600     Wage expense 51170    Payroll tax 3930    Utility Exps 13930 Office expenses 3560 Cost of Material & Supplies Used 7910 Depreciation exps 6200 12(b) Net Position- Unrestricted 11600     Excess of Cost over Net billing to Dept 11600 12© Net Position- Netinvestment in Capital Asset 6200    Net Position- Unrestricted 6200 a-3 Statement of Revenue, Expenses & change in net position Billing to Department 75100 Operating expense Wage expense 51170 Payroll tax 3930 Office expenses 3560 Utility exps 13930 Cost of material used 7910 Depreciation exps 6200 86700 Net Position as on 31/12/2017 -11600 b Statement of Net position as on 31/12/2017 Asset Cash 7840 Due from other funds 5400 Material & supply inventory 470 13710 Capital Asset Machinery 52200 less:Allwance for depreciation -35500 16700 Total Asset 30410 Liabilities Accounts Payable 2830 Due to Federal Govt 2280 Due to Other funds 1400 6510 Net Position- Net Invetsment in Capital Asset 16700 Net Position Unrestricted 7200 Total Net Position 30410

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