Question

The Town of Weston has a Water Utility Fund with the following trial balance as of July 1, 2016, the first day of the fiscal year:

	Debits			Credits
Cash	$	333,000
Customer accounts receivable		201,800
Allowance for uncollectible accounts				$	30,300
Materials and supplies		121,200
Restricted assets (cash)		253,000
Utility plant in service		7,004,000
Accumulated depreciation—utility plant					2,603,000
Construction work in progress		103,000
Accounts payable					123,600
Accrued expenses payable					77,300
Revenue bonds payable					3,503,000
Net position					1,678,800
Totals	$	8,016,000		$	8,016,000

During the year ended June 30, 2017, the following transactions and events occurred in the Town of Weston Water Utility Fund:

Accrued expenses at July 1 were paid in cash.

Billings to nongovernmental customers for water usage for the year amounted to $1,383,000; billings to the General Fund amounted to $110,000.

Liabilities for the following were recorded during the year:

Materials and supplies	$	189,000
Costs of sales and services		363,000
Administrative expenses		204,000
Construction work in progress		222,000

Materials and supplies were used in the amount of $278,000, all for costs of sales and services.

$14,200 of old accounts receivable were written off.

Accounts receivable collections totaled $1,482,800 from nongovernmental customers and $49,000 from the General Fund.

$1,047,800 of accounts payable were paid in cash.

One year’s interest in the amount of $177,200 was paid.

Construction was completed on plant assets costing $253,000; that amount was transferred to Utility Plant in Service.

Depreciation was recorded in the amount of $263,100.

Interest in the amount of $25,300 was reclassified to Construction Work in Progress. (This was previously paid in item 8.)

The Allowance for Uncollectible Accounts was increased by $10,000.

As required by the loan agreement, cash in the amount of $103,000 was transferred to Restricted Assets for eventual redemption of the bonds.

Accrued expenses, all related to costs of sales and services, amounted to $92,000.

Nominal accounts for the year were closed.

Required:
a. Record the transactions for the year in general journal form.
b. Prepare a Statement of Revenues, Expenses, and Changes in Fund Net Position.
c. Prepare a Statement of Net Position as of June 30, 2017.
d. Prepare a Statement of Cash Flows for the year ended June 30, 2017. Assume all debt and interest are related to capital outlay. Assume the entire construction work in progress liability (see item 3) was paid in entry 7. Include restricted assets as cash and cash equivalents.

Answer 1

1	GENRAL JOURNAL
		Dr	Cr
1	Accrued Expenses	77300
	To Cash		77300
2	Customer accounts receivable	1493000
	To Billing for water		1383000
	To Billing for General Fund		110000
3	Matrial Supply	189000
	To Accounts Payable		189000
4	Costs of sales and services	363000
	To Accounts Payable		363000
5	Administrative expenses	204000
	To Accounts Payable		204000
6	Construction work in progress	222000
	To Accounts Payable		222000
7	Accounts Written off	14200
	To Customer accounts receivable		14200
8	Cash	1482800
	To Customer accounts receivable		1482800
9	Cash	49000
	To Customer accounts receivable		49000
10	Accounts Payable	1047800
	To cash		1047800
11	Interest	177200
	to cash		177200
13	Construction work in progress	25300
	to interest		25300
14	Utility Plant and Services	253000
	To Construction work in progress		253000
15	Depriciation	263100
	To Accumulated depreciation—utility plant		263100
16	Bed debts allownce	10000
	To Allownce for uncollectible account		10000
17	Restricted assets (cash)	103000
	To Cash		103000
13	cost of sales & Services	92000
	To Accrued Expenses		92000
	Assumed to be not included in the figure of Cost of sale & services expenses		2 statement of Revenue & Expenses Dr Cr Particulars Amount Particulars Amount Material Supply 278000 To Billing for water 1383000 Costs of sales and services 455000 To Billing for General Fund 110000 Administrative expenses 204000 Accounts Written off 14200 Interest 151900 Depriciation 263100 Bed debts allownce 10000 Excess of Funds over expenes 116800 1493000 1493000 3 statement of changes in fund net position Particulars Amount Particulars Amount Opening Net Position 1678800 Excess of Funds over expenes 116800 Closing Net Position 1795600 1795600 1795600 statement net position Particulars Dr Cr Cash 459500 Customer accounts receivable 148800 Allowance for uncollectible accounts 40300 Materials and supplies 32200 Restricted assets (cash) 356000 Utility plant in service 7257000 Accumulated depreciation—utility plant 2866100 Construction work in progress 97300 Accounts payable 53800 Accrued expenses payable 92000 Revenue bonds payable 3503000 Net position 1795600 8350800 8350800 statement of Cash Flow Cash From Operating Activities Customer Account receivable 1482800 Fund Account Receivable 49000 Accrued Expenses Paid -77300 Accounts Payable -825800 Total A 628700 Cash From Investing Activities Construction work in progress -222000 Total B -222000 Cash From Financing Activites Interest Paid -177200 Total C -177200 Total Cash Inflow (Outflow) 229500 Opening Cash & equvilents cash 333000 Restricted Cash 253000 Total Opening Cash 586000 Opening Cash + Total Inflow (OutFlow) 815500 Closing Cash 459500 Closing Restricted Cash 356000 Clsoing Cash 815500 Note Customer Account Receivable Accounts Payable Openin Balance 201800 Openin Balance 123600 Total Billing For the Year 1493000 Total Due For the Year( entry 3,4,5,6) 978000 Total Collection For the Year -1531800 Total Payment For the Year -1047800 Bad debts -14200 Net Balance at the end of Year 53800 Net Balance at the end of Year 148800 Balance Material Construction WIP Opening Material 121200 Opening Balance 103000 Purchased during the year 189000 Expenes for the Year 222000 Used during the year -278000 Interest Capitalize 25300 closing Balance of Material 32200 Transfer to Plant -253000 Closing Balances 97300 other accounts of statement of net positions are self explanatory , which can be tallied by posting ledger entries in respective accounts