Reference no: EM132685917
The City of Kent established a self-supporting department a few years ago to centralize purchase for the government. The mission is to reduce costs and avoid duplication of efforts. All costs will be recovered through user fees, but any excess of fees over expenses should be less than 4 percent. The preclosing trial balance for the IT department as of last year, is shown below.
Debits
Cash $14,600
Due from Other Funds 4,730
Materials and Supplies Inventory 410
Machinery and Equipment 54,700
Total Debit: 74,440
Credits
Accumulated Depreciation $31,000
Accounts Payable 2,690
Due to Federal Government 2,740
Due to Other Funds 1,210
Net Position-Net Investment in Capital Assets 23,700
Net Position-Unrestricted 13,100
Total Credit: 74,440
During the current fiscal year ended December 31, the following transactions (summarized in thousands of dollars) occurred:
- Gross employee wages were $60,600, including the employer's share of social security taxes amounting to $4,310. Federal income and social security taxes withheld from that amount totaled $19,700.
- Office expenses in the amount of $3,910 were paid in cash.
- Materials and supplies purchased on account during the year were $8,880.
- A bill totaling $15,350 was received for utilities provided by Washington City's utility fund.
- Cash paid to the federal government for payroll taxes was $24,200.
- Cash paid to the Utility Fund was $14,600.
- Accounts payable at year-end totaled $3,090. Prepare the adjusting entry related to accounts payable.
- Materials and supplies used during the year were $8,660.Prepare the adjusting entry related to materials and supplies.
- Charges to departments during the fiscal year were as follows. Prepare the adjusting entry related to charges to departments. General Fund $60,300, Special Revenue Fund $21,400
- Unpaid balances at year-end were. Prepare the adjusting entry related to due from other funds. General Fund $3,600, Special Revenue Fund $1,900
- The depreciation for the year was $5,800.
- Revenue and expense accounts for the year were closed.
Problem 1: Prepare journal entries for the Information Technology Fund for the current year ended December 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands of dollars.)
Problem 2: Prepare closing entry for the Information Technology Fund for the current year ended December 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands of dollars.)
Record the closure of revenue and expense accounts.
Record the operating loss for the year.
Record the transfer of depreciation expense to the asset account.