Prepare entries to record the transactions

Assignment Help Accounting Basics

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

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