-14. Rural County is an agricultural community located hundreds of miles from an

Question

-14. Rural County is an agricultural community located hundreds of miles from any metropolitan center. The County established a Television Reception Improvement Fund to serve the public interest by constructing and operat- ing television translator stations. TV translator stations serve communities that cannot receive the signals of free over-the-air TV stations because they are too far away from a broadcasting TV station. Because of the large distances between customers, commercial cable TV providers are also not inclined to serve rural communities. The fund charges TV owners a monthly fee of $15. The fund was established on December 20, 2016, with a transfer of cash from the General Fund of $125,000. On December 31, 2016, the fund acquired land for its translator stations in the amount of $40,000. The remaining cash and the land are the only resources held by the fund at the beginning of 2017. 1. Other than beginning account balances, no entries have been made in the general ledger. 2. The county prepared a budget for 2017 with estimated customer fees of $32,000, operating costs of $28,000, capital costs of $66,000, and estimated loan proceeds of $55,000. 3. The following information was taken from the checkbook for the year ended December 31, 2017. Cash Basis 12 months Cash Receipts: Fees from customers Borrowing from bank $33,250 52,000 85,250 Total deposits Cash Disbursements: Supplies Labor Utilities Equipment Interest on bank note 7,300 9.900 7,500 64,000 2,080 90,780 85,000 $79,470 Total checks Beginning Cash Balance Ending Cash Balance

Explanation / Answer

Part:1

a) Journal Enties

1 Oct,2017 Interest on Bank Loan A/c .......Dr 2080

To Bank Loan A/c    2080

( Being Interest on bank loan for the period April to Sep,2017)

Profit & Loss A/c ........................Dr 2080

To Interest on Bank Loan  A/c 2080

(Being transfer of interest on bank loan to P&l)

31/12/2017 Depreciation a/c .........................Dr 4800

To Equipement 4800

(Being Depreciation on Equipement on Straight line basis

for 9 monthd period i.e., Apr to Dec,2017 (64000/10*9/12))

  

Prfit & Loss A/c ........................Dr 4800

To Depreciation A/c 4800

(Being transfer of depreciation on Equipment to P&l)

Fee Receivable A/c ........................Dr 2100

To Fee from customers 2100

( Being Fee receivable from customers for Dec,2017 service)

29 Dec,2017 Supplies A/c ....................................Dr 800

To Creditors for Supplies 800

(Being payables for Supplies received)

31 Dec,2017 Closing Stock (Balance Sheet) ......................Dr 760

To Closing Stock (Trading, P&L) 760

(Being Closingstock of unused supplies as on 31,Dec,2017)

Utilities A/c .................................................Dr 620

To Accounts Payable 620

(Being Dec,2017 Utilities payable)

21 Dec,2017 No Entry for Placing an order for Computerised control as it is delivered and paid in Jan ,2017 which is a different accounting period.

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