Question

The Village of Seaside Pines prepared the following enterprise fund Trial Balance as of December 31, 2020, the last day of its fiscal year. The enterprise fund was established this year through a transfer from the General Fund.

	Debits			Credits
Accounts payable				$	117,000
Accounts receivable	$	31,900
Accrued interest payable					35,100
Accumulated depreciation					53,500
Administrative and selling expenses		55,500
Allowance for uncollectible accounts					13,900
Capital assets		732,000
Cash		99,500
Charges for sales and services					579,000
Cost of sales and services		509,000
Depreciation expense		53,500
Due from General Fund		18,200
Interest expense		41,400
Interest revenue					6,200
Transfer in from General Fund					128,500
Bank note payable					628,500
Supplies inventory		20,700
Totals	$	1,561,700		$	1,561,700

a. Prepare the reconciliation of operating income to net cash provided by operating activities that would appear at the bottom of the December 31 Statement of Cash Flows. Recall that the beginning balance of all assets and liabilities is zero.

b. . Prepare the Net Position section of the December 31 balance sheet. (Assume that the revenue bonds were issued to acquire capital assets and there are no restricted assets.)

Answer 1

Income Statement for the period ended 31.12.2020			Balance Sheet as on 31.12.2020
Particulars	Amount	Particulars	Amount		Liabilities	Amount	Amount	Assets	Amount	Amount
		sales and services	579000
Cost of goods sold	509000							Non Current Assets:
					Transfer in from general fund	128500		Capital assets	732000
Gross profit	70000				-Due from general fund	18200		-depreciation	53500	678500
	579000		579000		-Profit/(loss)	60300	50000
		Gross profit	70000
Administrative and selling cost	55500				Bank note payable		628500
Depreciation	53500				Current Liabilities			Current Assets:
Interest expenses	41400	Interest revenue	6200		Accounts payable		117000	Accounts receivable		31900
		Allowance for uncollectible	13900		Accrued interest payable		35100	cash		99500
								inventory		20700
							830600			830600
Net profit	-60300
	90100		90100

Reconciliation station of Operating income and Operating cash flow
Particulars	Note	Amount
Cashflow from Operational activities
Operating Profit Before Tax		-60300
Add
Depreciation		53500
Interest Expenses		41400
increase in accounts payable		117000
increase in accrued interest payable		35100
Less
Allowance for uncollectable accounts		13900
interest revenue		6200
increase in accounts receivables		31900
increase in inventory		20700
Cash Flow from the Operating activities		114000
Assumption: It is assumed that Bank note payable are non current liabilities and doesn’t come under the operating cash foow
ii) Net position as on 31.12.2020 is $ 50000 from the above balance sheet