Reference no: EM131797057
Assignment
The following Statement of Cash Receipts and Disbursements was prepared by the bookkeeper of the City of Glass City Museum of Science. The museum is a component unit of the City of Glass City and must be included in the city's financial statements. It began operations on January 1, 2012 with no liabilities or commitments and only two assets.
(1) $6,000 in cash and (2) Land that was acquired for $11,000.
Cash Basis
12 months
Cash Receipts:
Admission Fees $295,000
Loan from the Bank $50,000
Total deposits $345,000
Cash Disbursements:
Supplies $62,000
Wages 104,000
Utilities 48,000
Purchase of Equipment 70,000
Purchase of Fixtures 45,000
Interest on the Bank Loan 1,250
Total checks $330,250
Excess of Receipts Over Disbursements $14,750
Additional Information:
• The loan from the bank is dated April 1 and is for a five-year period. Interest (5% annual rate) is paid on Oct. 1 and April 1 of each year, beginning Oct. 1, 2012.
• The equipment was purchased on April 1, 2012 with the proceeds provided by the bank loan and has an estimated useful life of 10 years (please use the straight-line method of depreciation) for computing depreciation on the equipment. The fixtures were purchased on July 1, 2012 and has an estimated useful life of five years (please use the straight-line method of depreciation) for computing depreciation on the fixtures.
• Supplies on-hand amounted to $5,900 at December 31, 2012.
• All other bills and salaries related to 2012 had been paid by the close of business on December 31.
Required:
Prepare a Statement of Revenues, Expenses, and Changes in Net Assets for the year ended December 31, 2012 assuming the city plans to account for its activities on the accrual basis.