Prepare entries to record the transactions

Reference no: EM131525763

Question: The City of Sandwich purchased a swimming pool from a private operator as of April 1, 2012, for $500,000. Of the $500,000, $250,000 was provided by a one-time contribution from the General Fund, and $250,000 was provided by a loan from the First National Bank, secured by a note. The loan has an annual interest rate 6 percent, payable semiannually on October 1 and April 1; principal payments of $100,000 are to be made annually, beginning on April 1, 2013. The city has a calendar year as its fiscal year. During the year ended December 31, 2012, the following transactions occurred, related to the City of Sandwich Swimming Pool:

1. The amounts were received from the City General Fund and the First National Bank.

2. A short-term loan was provided in the amount of $100,000 from the Water Utility Fund.

3. The purchase of the pool was recorded. Based on an appraisal, it was decided to allocate $100,000 to the land, $300,000 to improvements other than buildings (the pool), and $100,000 to the building. There is a 10-year life for both the pool and the building, and depreciation is to be recorded annually, based on monthly allocations (do not record depreciation until entry 10).

4. Charges to patrons during the season amounted to $340,000, all received in cash.

5. Salaries paid to employees amounted to $200,000, all paid in cash, of which $170,000 was cost of services, and $30,000 was administration.

6. Supplies purchased amounted to $40,000; all but $5,000 was used. Cash was paid for the supplies, all of which was for cost of sales and services.

7. Administrative expenses amounted to $12,000, paid in cash.

8. The first interest payment was made to the First National Bank.

9. The short-term loan was repaid to the Water Utility Fund.

10. Depreciation was accrued for the year. Record 9/12 of the annual amounts.

11. Interest was accrued for the year.

12. Closing entries were prepared.

Required: a. Prepare entries to record the transactions.

b. Prepare a Statement of Revenues, Expenses, and Changes in Fund Net Assets for the Year Ended December 31, 2012, for the City of Sandwich Swimming Pool Fund.

c. Prepare a Statement of Net Assets as of December 31, 2012, for the City of Sandwich Swimming Pool Fund.

d. Prepare a Statement of Cash Flows for the Year Ended December 31, 2012, for the City of Sandwich Swimming Pool Fund.

Reference no: EM131525763

Questions Cloud

Bond settles assuming the bond follows street convention : What will be the invoice price of this bond when the bond settles assuming the bond follows street convention

Wage comparison exercise : Read the entire exercise (all questions) before beginning. More compensation information is available than ever before.

What is the bond nominal yield to maturity : What is the bond's nominal yield to maturity? What is the bond's nominal yield to call? Would an investor be more likely to earn the YTM or the YTC?

Prepare the entry to record bad debts expense : Average Art is a new business. During its first year of operations, credit sales were $40,000. Prepare the entry to record bad debts expense.

Prepare entries to record the transactions : The City of Sandwich purchased a swimming pool from a private operator as of April 1, 2012, for $500,000. Of the $500,000, $250,000 was provided by a one-time.

What is the main claim of the speaker : What is the main claim of the speaker? What do they want the audience to think or do as a result of their speech

Sexual desire and sexual attraction to others : If an individual suffers damage to their genital nerves they usually lose their sexual desire and sexual attraction to others.

Although multinational corporations : Although multinational corporations seem to be growing in size and influence, what must occur before transnational collective bargaining can be effectively.

Identify the challenges and potential issues : Develop recommendations for strategies to address these challenges and help the newly formed company meet its goals.

User Account

All Pages