Question

Washington City created an Information Technology department in 2013 to centralize information technology (IT) functions for the city. The goal of the department was to reduce costs, avoid duplication of efforts, and provide up-to-date technology to all of the city’s operations. The fund was designed to be self-supporting; that is, all costs are to be recovered through user fees, but any excess of fees over expenses should be less than 5%. The pre-closing trial balance for the IT department as of December 31, 2017 is shown below.

	Debits				Credits
Cash	$	14,500
Due from Other Funds		4,250
Materials and Supplies Inventory		350
Machinery and Equipment		53,600
Accumulated Depreciation					$	30,100
Accounts Payable						2,550
Payroll Taxes Payable						2,650
Due to Other Funds						1,200
Net Position – Net Investment in Capital Assets						23,500
Net Position – Unrestricted						12,700
	$	72,700			$	72,700

During the fiscal year ended December 31, 2017, the following transactions (summarized) occurred:

1.	Gross employee wages were $57,600, including the employer’s share of social security taxes amounting to $4,100. Federal income and social security taxes withheld from that amount totaled $18,725.
2.	Office expenses in the amount of $3,700 were paid in cash.
3.	Materials and supplies purchased on account during the year were $8,400.
4.	Received a bill totaling $14,525 for utilities provided by Washington City’s utility fund.
5.	Cash paid to the federal government for payroll taxes was $23,000.
6.	Cash paid to the Utility Fund was $14,500.
7.	Accounts payable at year end totaled $2,950.
8.	Materials and supplies used during the year were $8,250.
9.	Charges to departments during the fiscal year were as follows:

General Fund	$	57,500
Special Revenue Fund		20,600

10.	Unpaid balances at year end were:

General Fund	$	3,500
Special Revenue Fund		1,800

11.	The depreciation for the year was $6,100.
12.	Revenue and expense accounts for the year were closed.

Required

a-1.

Prepare journal entries for the Information Technology Fund for 2017. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) (Journal entries are numberes 1-11)

1. Gross employee wages were $57,600, including the employer’s share of social security taxes amounting to $4,100. Federal income and social security taxes withheld from that amount totaled $18,725. 2. Office expenses in the amount of $3,700 were paid in cash. 3. Materials and supplies purchased on account during the year were $8,400. 4. Received a bill totaling $14,525 for utilities provided by Washington City’s utility fund. 5. Cash paid to the federal government for payroll taxes was $23,000. 6. Cash paid to the Utility Fund was $14,500. 7. Accounts payable at year end totaled $2,950. 8. Materials and supplies used during the year were $8,250. 9. Record the billing to departments. 10. Record the cash received from other funds. 11. The depreciation for the year was $6,100. Additionally,

Prepare closing entry for the Information Technology Fund for 2017. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) (Journal Entries are numbered 1-3) 1. Record the closure of revenue and expense accounts. 2. Record the operating loss for the year. 3. The depreciation for the year was $6,100.

Answer 1

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.

Date	Account	Debit	Credit
1	Wage Expense (57600-4100)	53500
	Payroll Tax Expense	4100
	Cash		34775
	Due to Federal (4100+18725)		22825
2	Office Expense	3700
	Cash		3700
3	Material and Supplies Inventory	8400
	Accounts Payable		8400
4	Utility Expense	14525
	Due to other funds		14525
5	Due to Federal	23000
	Cash		23000
6	Due to other funds	14500
	Cash		14500
7	Accounts Payable (2550+8400-2950)	8000
	Cash		8000
8	Cost of Material and Supplies	8250
	Material and Supplies Inventory		8250
9	Due from other Funds	78100
	Billing to Department		78100
10	Cash (4250+78100-3500-1800)	77050
	Due from other Funds		77050
11	Depreciation Expense	6100
	Allowance for Depreciation		6100
Closing Entries:
1a	Billing to Department	78100
	Excess of Cost over Net Billings to Department	12075
	Wage Expense		53500
	Payroll Tax Expense		4100
	Utility Expense		14525
	Office Expense		3700
	Cost of Material and Supplies		8250
	Depreciation Expense		6100
1b	Net Position- Unrestricted	12075
	Excess of Cost over Net Billings to Department		12075
1c	Net Position-Net investment in capital asset	6100
	Net Position-Unrestricted		6100