A contra-asset appears on the income statement. a. True b. ...

[jayhills49]

A contra-asset appears on the income statement.
 a. True
   b. False
   Indicate whether the statement is true or false

Question 2

Building depreciation is 900,000 / 30 = 30,000; for 6 months, it is 15,000.)
 
   k. Repair parts expense 42,000
   Repair parts inventory 42,000
 
   l. Salaries expense 12,000
   Accrued salaries payable 12,000
 
   m.
 
  Interest expense 42,750
   Interest payable 42,750
 
  (Note: The interest accrual is based on outstanding bonds of 2,850,000 for 3 months at 6 percent per annum.)
 
   41 (Preparing closing entries and financial statements from a trial balance.)
 
  Presented on the following page is the adjusted trial balance for the Water Enterprise Fund of the City of Whitt at December 31, 2013, the end of the fiscal year. Based on this information,
   a. prepare the entry necessary to close the accounts
   b. compute the ending balances for (1) net investment in capital assets, (2) restricted net position, and (3) unrestricted net position
 
  (Note: Debt related to the capital assets consists solely of the revenue bonds payable.)
 
  City of Whitt
  Water Enterprise Fund
  Adjusted Trial Balance
  December 31, 2013
 
  Cash and cash equivalents
   890,430
 
  Cash, restricted
  47,500
 
  Investments
  2,037,000
 
  Due from other funds
  595,000
 
  Land
  976,000
 
  Machinery and equipment
  2,264,000
 
  Accumulated depreciation, machinery and equipment
 
   1,840,000
 
  Buildings
  2,058,000
 
  Accumulated depreciation, buildings
 
  933,000
 
  Accounts payable
 
  398,250
 
  Revenue bonds payable, current portion
 
  50,000
 
  Revenue bonds payable, noncurrent portion
 
  1,650,000
 
  Net position
 
  4,087,000
 
  Revenues - charges for services
 
  3,608,000
 
  Revenues - other
 
  31,520
 
  Operating expenses - purchase of water
  2,389,000
 
  Operating expenses - materials and supplies
  276,000
 
  Operating expenses - personal services
  827,195
 
  Operating expenses - depreciation
  253,000
 
  Nonoperating revenues-investment revenues
 
  29,680
 
  Nonoperating expenses-interest
   14,325
   .
 
  12,627,450
  12,627,450

[coyin]

Answer to Question 1

False

Answer to Question 2

a. Closing entry

Revenues-charges for services 3,608,000
Revenues-other 31,520 Nonoperating revenues-investment revenues 29,680
Net position 90,230
Nonoperating expenses-interest 14,235
Operating expenses - purchase of water 2,389,000 Operating expenses - materials and supplies 276,000 Operating expenses - personal services 827,195 Operating expenses - depreciation 253,000

b. Net position balances:

Total net position at December 31, 2013 = 4,087,000 + 90,230 = 4,177,230

Net investment in capital assets =
Land  976,000
Machinery and equipment 2,264,000
Buildings 2,058,000
Total capital assets 5,298,000
Less accumulated depreciation
Machinery and equipment 1,840,000
Buildings 933,000 2,773,000
= Net capital assets  2,525,000
Less related debt
Current portion of long-term debt 50,000
Noncurrent portion of long-term debt 1,650,000
= Net investment in capital assets  825,000

(2) Restricted net position =
Cash, restricted  47,500

(3) Unrestricted net position =
Total net position  4,177,230
Less Net investment in capital assets 825,000
Restricted net position 47,500
= 3,304,730