Question

Augusta has a municipal water and gas utility district (MUD). The trial balance on January 1, 20X1, follows:

Debit Credit

Cash $ 92,700

Accounts Receivable 26,500

Inventory of Supplies 9,400

Land 120,100

Plant and Equipment 492,000

Accumulated Depreciation $ 80,700

Vouchers Payable 15,500

Bonds Payable, 6% 518,000

Net Position:

Invested in Capital Assets, Net of Related Debt 13,400

Unrestricted 113,100

Total $ 740,700 $ 740,700

Additional Information for 20X1:

Charges to customers for water and gas were $421,700; collections were $433,000.

A loan of $31,080 for two years was received from the general fund.

The water and gas lines were extended to a new development at a cost of $75,700. The contractor was paid.

Supplies were acquired from central stores (internal service fund) for $12,800. Operating expenses were $329,200, and interest expense was $31,080. Payment was made for the interest and the payable to central stores, and $325,500 of the vouchers were paid.

Adjusting entries were as follows: estimated uncollectible accounts receivable, $6,900; depreciation expense, $33,500; and supplies expense, $16,400.

Required:

a. Prepare entries for the MUD enterprise fund for 20X1 and closing entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)journal entries E-H ERecord the payment for the extended lines.

FRecord the expenses.

GRecord the payment of the approved vouchers, interest, and payment to the Central Stores Fund.

HRecord the entry to reduce the revenue for the uncollectible accounts.

Answer 1

Prepare entries as follows:

Trn.	Account Titles	Debit	Credit
1)	Accounts Receivable	$421,700
	Revenue		$421,700
	Cash	$433,000
	Accounts Receivable		$433,000
2)	Cash	$31,080
	Due to general fund		$31,080
3)	Plant and equipment	$75,700
	Contracts payable		$75,700
	Contracts payable	$75,700
	Cash		$75,700
4)	Supplies	$12,800
	Operating Expense	$329,200
	Interest Expense	$31,080
	Due to central stores fund		$12,800
	Vouchers payable		$329,200
	Interest payable		$31,080
	Due to central stores fund	$12,800
	Vouchers payable	$325,500
	Interest payable	$31,080
	Cash		$369,380
5)	Revenue	$6,900
	Allowance for uncollectibles		$6,900
	Depreciation Expense	$33,500
	Accumulated Depreciation		$33,500
	Supplies Expense	$16,400
	Supplies		$16,400

_________________________________________________________________

Prepare Closing entries as follows:

Account Titles	Debit	Credit
Revenue [$421700 - $6900]	$414,800
Operating Expense		$329,200
Interest Expense		$31,080
Depreciation Expense		$33,500
Supplies Expense		$16,400
Profit & Loss Summary		$4,620
Profit & Loss Summary	$4,620
Net Assets-Unrestricted		$4,620
Net Assets-Unrestricted	$42,100
Net Assets-Invested in capital		$42,100
W.N
Land		$120,000
Plant and equipment	$492,000
Add: New Plant and equip.	$75,700
Less: Accumulated depreciation [$80700 + $33500]	($114,200)	$453,500
Ending balance		$573,500
Less: bond payable		($518,000)
Less: Net position , Beg. Bal.		($13,400)
		$42,100