Question

g The Village of Lake George decided to establish an internal service fund to account for the operations of a Print Shop. The Print Shop is to begin operations on July 1, 2016 the first day of the City's fiscal year. During the fiscal year ended June 30, 2017 the following transactions occurred: (a) The General Fund made a permanent contribution of $400,000 and a long-term advance of $800,000 to the Print Shop Fund. The advance is to be repaid by the Print Shop Fund in four equal annual installments; the first installment is due 6/30/2017. The advance is non-interest bearing and is considered issued for the purchases of equipment. (b) During the year equipment was purchased (for cash) in the amount of $ 890,000. (c) During the year, printing supplies costing $120,000 were purchased; all but $30,000 was paid in cash. (d) Billings to departments during the

Answer 1

Check the explanation

Step-by-step explanation:

General Journal

Ref. Account Title & explanation Debit Credit

a) Cash $1,200,000

Contribution $400,000

Long term liability $800,000

(To record receipt of fund )

b) Equipment $890,000

Cash $890,000

(To record purchase of equipment)

c) Supplies $120,000

Accounts payable $30,000

Cash $90,000

(To record purchase of supplies)

d) Cash $350,000

Accounts receivable $50,000

Sales $400,000

(To record sales )

e) Supplies expenses $73,000

Supplies $73,000

(To record supllies expenses)

f) Salaries and wages expenses $19,000

Cash $19,000

(To record salaries and wages expenses)

Utilities expenses $3,000

Cash $3,000

(To record utilities expenses)

g) Depreciation expenses $80,000

Accumulated depreciation-Equipment $80,000

(To record depreciation expenses)

h) Long term liability $200,000

Cash $200,000

(To record payment of instalment of advance)

Ref. CASH ACCOUNT Debit Credit

a) Contribution $400,000

a) Long term liabilities $800,000

b) Equipment $890,000

c) Supplies $90,000

d) Sales $350,000

f) Salaries & wages expenses $19,000

f) Utilities expenses $3,000

h) Long term liabilities $200,000

Balance $348,000

TOTAL $1,550,000 $1,550,000

Closing balance brought forward $348,000

TRIAL BALANCE

Account Debit Credit

Cash $348,000

Contribution $400,000

Long term liabilities $600,000

Equipment $890,000

Supples $ 47,000 (120000-73000)

Accounts payable $30,000

Accounts receivable $50,000

Sales $400,000

Supplies expenses $73,000

Salaries and wages expenses $19,000

Utilities expenses $3,000

Depreciation expenses $80,000

Accumulated depreciation-equipment $80,000

TOTAL $1,510,000 $1,510,000

INCOME STATEMENT

Contribution $400,000

Sales $400,000

Total income $800,000

Expenses:

Supplies expenses $73,000

Salaries and wages expenses $19,000

Utilities expenses $3,000

Depreciation expenses $80,000

Total expenses $175,000

Net Income $625,000

BALANCE SHEET

ASSETS:

Cash $348,000

Supples $ 47,000

Accounts receivable $50,000

Equipment $890,000

Accumulated depreciation ($80,000)

Total assets $1,255,000

Liabilities:

Accounts payable $30,000

Long term liabilities $600,000

Net assets $625,000

Total Liabilities & net assets $1,255,000