Question

A. Record the following transactions in the appropriate fund.

Water Utility Fund

1. Billed General Fund $40,000 for water usage and the citizens of NWTC $285,000 for water usage.

2. Collected $40,000 from General Fund and $275,000 from citizens from water billings.

3. Received and paid bill from Computer Services Fund of $45,000.

4. Purchased equipment costing $25,000 (paid cash).

5. Paid following bills:

a. Salary and fringes - $100,000

b. Supplies - $10,000

c. Repairs and Maintenance - $15,000

6. Annual depreciation of $70,000 is recorded ($50,000 on building and $20,000 on equipment)

Answer 1

1.

Water expense A/c Dr. $325,000

To General Fund A/c. $40,000

To Citizens of NWTC Fund A/c $285,000

( Water expense booked or billed )

Note : expense always debited and funds always cotaico liavliabi so credited

2.

No entry for collection

3.

A. Computer Services A/c Dr. $45,000

To Computer Service Fund A/c $45,000

( Computer Service expense has been booked )

B. Computer Service Fund A/c Dr. $45,000

To Bank A/c. $45,000

( Computer service expense paid )

Note : Computer service fund is a liability which increases gets credited and vice versa, Bank is asset goes down results in credit, Expense always debited

4.

Equipment A/c Dr. $25,000

To Cash A/c $25,000

( Equipment purchased I.e an asset )

Note : asset increases gets debited and vice versa thus while purchasing cash is going and equipment is increased

5.

a. Salary and Fringes A/c Dr. $100,000

To. Bank A/c. $100,000

( Salary and Fringes paid )

b. Supplies A/c. Dr. $10,000

To Bank A/c $10,000

( Amount paid for supplies )

c. Repair and Maintenance A/c Dr. $15,000

To Bank A/c $15,000

( Amount paid for repair and maintenance )

Note : Expenses always debited when increases and asset decrease gets credited here bank is decreasing as paying off

6.

A. Depreciation on Building A/c Dr. $50,000

To . Building A/c. $50,000

( Depreciation on Building recorded )

B. Depreciation on epquequip A/c Dr. $20,000

To Equipment A/c . $20,000

( Depreciation on equipment recorded )

Note : depreciation is an expense, expense increases gets debited on the other hand equipment and building are asset which get reduced by depreciation and hence credited