Question

As of July 1, 2017, the Village of Boiling Springs decided to purchase a privately operated swimming pool and to create a swimming pool (enterprise) fund. During the year, the following transactions occurred:

A permanent contribution of $600,000 was received from the general fund.

Revenue bonds were sold at par in the amount of $1,200,000.

Several items were purchased for cash, with a cost breakdown as follows: land, $300,000; building, $400,000, land improvement, $400,000; equipment, $200,000; and supplies, $150,000.

Charges for services amounted to $600,000, all received in cash.

Cash expenses included salaries of $200,000; utilities of $100,000; and interest of $72,000.

Supplies were consumed in the amount of $120,000.

Depreciation was recorded as follows: building, $20,000, land improvement, $20,000; and equipment, $20,000.

The books were closed. Close all accounts to net position.

Required:

Record the above transactions in general journal form (on the books of the swimming pool fund) using the template in this module.

Answer 1

Village of Boiling Springs

SWIMMING POOL FUND

General Journal

S.No Account title and explanation Debit Credit
1. Cash $600000 Transfers In(from general Fund) $600000 (being funds transferred from GF)
2. Cash $1200000 Revenue Bonds Payable $1200000 (Being Revenue bonds sold at par)   
3. Land $300000 Building $400000 Land improvement $400000 Equipment $200000 Supplies $150000 Cash $1450000 (Being sevaral items purchased for cash)   
4. Cash $600000 Operating revenue - Charges for services $600000 (Received Charges for services) 5. Operating expense-Salary $200000 Operating expense-utilities $100000 Non Operating expense- Interest $72000 Cash $372000 (Being operating and non Operating expenses paid)
6. Operating expense-Supplies $120000 Supplies $120000 (Being Supplies consumed)
7. Operating expense- Depreciation $60000 Accumulated Depreciation - Buliding $20000 Accumulated Depreciation - land improvement $20000   Accumulated Depreciation-Equipment $20000 (being depreciation of assets recorded)  
8. Operating Revenues- Charges for services

$600000 Transfers In(from General Fund)

$600000 Operating Expense - Salaries

$200000   Operating Expense - Utilities

$100000 Non Operating Expense - Interest

$72000   Operating Expense - Supplies

$120000   Operating Expense - Depreciation

$60000 Net Assets

$648000 (to close all accounts to net position.)