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ch07web - CHAPTER 7 ACCOUNTING FOR THE BUSINESS-TYPE...

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CHAPTER 7: ACCOUNTING FOR THE BUSINESS-TYPE ACTIVITIES OF STATE AND LOCAL GOVERNMENTS Solutions to Exercises and Problems 7-2. 1. b . 6. a . 2. d . 7. a . 3. b. 8. d . 4. c . 9. d . 5. b . 10. c . 7-3. TOWN OF FREDERICK CENTRAL DUPLICATING FUND GENERAL JOURNAL (NOT REQUIRED) Debits Credits 1. WAGE EXPENSE 333,500 PAYROLL TAX EXPENSE 23,375 CASH 290,000 DUE TO FEDERAL GOVERNMENT 66,875 2. DUE TO FEDERAL GOVERNMENT 65,500 CASH 65,500 3. UTILITY EXPENSE 23,500 DUE TO OTHER FUNDS 23,500 4. OFFICE EXPENSES 10,500 CASH 10,500 5. SERVICE SUPPLIES INVENTORY 157,500 ACCOUNTS PAYABLE 157,500 6. COST OF PARTS AND SUPPLIES USED 152,300 SERVICE SUPPLIES INVENTORY 152,300 7. DUE FROM OTHER FUNDS 588,000 BILLINGS TO DEPARTMENTS 588,000 8. CASH 578,200 DUE FROM OTHER FUNDS 578,200 (20,200 + 588,000 - 30,000) 9. DUE TO OTHER FUNDS 21,800 CASH 21,800 7-1
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10. ACCOUNTS PAYABLE 156,950 CASH 156,950 (12,700 + 157,500 - 13,250) 11. DEPRECIATION OF MACHINERY AND EQUIPMENT 30,000 ALLOWANCE FOR DEPRECIATION 30,000 12. Closing Entries : BILLINGS TO DEPARTMENTS 588,000 WAGE EXPENSE 333,500 PAYROLL TAX EXPENSE 23,375 UTILITY EXPENSE 23,500 OFFICE EXPENSES 10,500 COST OF PARTS AND SUPPLIES USED 152,300 DEPRECIATION OF MACHINERY AND EQUIPMENT 30,000 OPERATING INCOME 14,825 OPERATING INCOME 14,825 NET ASSETS—UNRESTRICTED 14,825 NET ASSETS—INVESTED IN CAPITAL ASSETS 30,000 NET ASSETS—UNRESTRICTED 30,000 7-2
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Ch. 7, Solutions, 7-3 (Cont'd) TOWN OF FREDERICK T- ACCOUNTS FOR AUTOMOTIVE SERVICE FUND (NOT REQUIRED) CASH DUE FROM OTHER FUNDS 9-30-07 15,000 (1) 290,000 9-30-07 20,200 (8) 578,200 (8) 578,200 (2) 65,500 (7) 588,000 (4) 10,500 (9) 21,800 (10) 156,950 SERVICE SUPPLIES INVENTORY MACHINERY AND EQUIPMENT 9-30-07 35,300 (6) 152,300 9-30-07 300,000 (5) 157,500 ALLOW FOR DEP 9-30-07 90,000 (11) 30,000 ACCOUNTS PAYABLE DUE TO FEDERAL GOVERNMENT (10) 156,950 9-30-07 12,700 (2) 65,500 9-30-07 1,500 (5) 157,500 (1) 66,875 DUE TO OTHER FUNDS NET ASSETS—UNRESTRICTED (9) 21,800 9-30-07 800 9-30-07 55,500 (3) 23,500 C.L. 14,825 C.L. 30,000 NET ASSETS—INVESTED IN CAP. ASSETS BILLINGS TO DEPARTMENTS C.L. 30,000 9-30-07 210,000 CL. 588,000 (7) 588,000 WAGE EXPENSE PAYROLL TAX EXPENSE (1) 333,500 CL. 333,500 (1) 23,375 CL. 23,375 UTILITY EXPENSE COST OF PARTS AND SUPPLIES USED (3) 23,500 CL. 23,500 (6) 152,300 CL. 152,300 DEPRECIATION OF MACH. AND EQUIP. OFFICE EXPENSES (11) 30,000 CL. 30,000 (4) 10,500 CL. 10,500 OPERATING INCOME CL. 14,825 CL. 14,25 7-3
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7-3. a
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ch07web - CHAPTER 7 ACCOUNTING FOR THE BUSINESS-TYPE...

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