Question

As of July 1, 2016, the Town of Selinsgrove decided to purchase a privately operated parking garage and to create a Parking Garage (Enterprise) Fund. During the year, the following transactions occurred:

a. A permanent contribution of $550,000 was received from the General Fund.
b. Revenue Bonds were sold at par in the amount of $1,000,000.
c. Purchased for cash several items, the cost breakdown was: land, $250,000; building, $600,000, land improvement, $200,000; equipment, $100,000; supplies, $15,000.
d. Charges for services amounted to $850,000, all received in cash.
e. Cash expenses included: salaries, $370,000; utilities, $75,000; interest, $72,000.
f. Supplies were consumed in the amount of $12,000.
g. Depreciation was recorded for: building, $15,000, land improvement, $20,000; equipment, $12,500.
h. The books were closed to Net Position.

Required:
A Statement of Revenues, Expenses, and Changes in Fund Net Position for the Town of Selinsgrove Parking Garage Fund for the Year Ended June 30, 2017

Answer 1

Town of Selinsgrove

A Statement of Revenues, Expenses, and Changes in Fund Net Position for the Town of Selinsgrove Parking Garage Fund for the Year Ended June 30, 2017

Service Revenue $850,000

Expenses:

Salaries $370,000

Utilities 75,000

Interest 72,000

Supplies 12,000 (529,000)

Depreciation:

Building 15,000

Land improvement 20,000

Equipment 12,500 (47,500)

Changes in Fund Net Position $273,500

Step-by-step explanation:

This is a government business activity with a specialized fund specifically dedicated to it. The Parking Garage (Enterprise) Fund is created by the Town of Selinsgrove to operate a parking garage. Its transactions are, therefore, recorded separately.

At the end of a fiscal period, the Statement of Revenues, Expenses, and Changes in Net Fund Position is prepared to assess the performance of the Fund. It is like the Income Statement for a profit-making entity, only that profits are not reported.