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How would receipt of grants be reported on the statement

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Reference no: EM13257278

The town of Brittainville has two Enterprise Funds- one forits water and wastewater operations and another for its cabletelevision operation. The Water and Wastewater Enterprise Fundissued $11,000,000 of 6%, 15-year refunding bonds at par during theyear. It also received a $175,000 federal grant to expand water andwastewater lines to economically depressed residentialneighborhoods. The Cable Enterprise Fund made its annual payment of$1,000,000 to the General Fund to subsidize operations. It also wasthe recipient of a Federal Communications Commission unrestrictedgrant of $100,000.

How would the receipt of the grants be reported on the statement of cash flows for the Water and Wastewater Enterprise Fund and the Cable Enterprise Fund, respectively?

A. Cash flows from capital and related financing activities forthe Water and Wastewater Enterprise Fund and cash flows from non capital financing activities for the Cable Enterprise Fund.

B. Assuming the Cable Enterprise Fund chose to use the proceedsof its grant fo capital needs, both funds would reflect the grantreceipt in cash flows from capital and related financing activities.

C. Cash flows from capital and related financing activities for the Water and Wastewater Enterprise Fund and cash flows fromoperating activities for the Cable Enterprise Fund.

D. Both funds would report the grant receipt as cash flows fromoperating activities.

Reference no: EM13257278

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