Question

Required information

E7-20 Central Garage Internal Service Fund [LO 7-4]

[The following information applies to the questions displayed below.]

The City of Ashville operates an internal service fund to provide garage space and repairs for all city-owned-and-operated vehicles. The Central Garage Fund’s preclosing trial balance for the current fiscal year is as follows:

	Debits				Credits
Cash	$	73,200
Due from Other Funds		6,000
Inventory of Supplies		60,000
Land		34,000
Building		166,000
Allowance for Depreciation—Building					$	13,200
Machinery and Equipment		42,800
Allowance for Depreciation—Machinery and Equipment						8,000
Vouchers Payable						20,800
Net Position—Net Investment in Capital Assets						221,600
Net Position—Unrestricted						118,400
	$	382,000			$	382,000

The following information, not yet reflected in the preclosing figures above, applies to the current fiscal year:

1. Supplies were purchased on account for $61,200; the perpetual inventory method is used.
2. The cost of supplies used during the year was $73,200. A physical count taken as of that date showed materials and supplies on hand totaled $48,000 at cost.
3. Salaries and wages paid to employees totaled $156,800, including related costs.
4. Billings totaling $20,000 were received from the enterprise fund for utility charges. The Central Garage Fund paid $18,000 of the amount owed. (At the government-wide level, record the payable amount as Internal Balances.)
5. Depreciation of the building was recorded in the amount of $6,800; depreciation of the machinery and equipment amounted to $6,000.
6. Billings to other departments for services provided to them were as follows:

General Fund	$	180,000
Special Revenue Fund		84,800

7. Unpaid interfund receivable balances were as follows:

	Beginning of Year				End of Year
General Fund	$	1,700			$	2,000
Special Revenue Fund		4,300				6,000

8. Vouchers payable at year-end were $10,800.

9. Closing entries were prepared for the Central Garage Fund (ignore government-wide closing entry).

E7-20 Part a

Required

1. a-1. Assume all expenses at the government-wide level are charged to the General Government function. Prepare journal entries to record all of the transactions for this period in the Central Garage Fund accounts and in the governmental activities accounts. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

Journal Enteries:

a)	Purchase	A/c	Dr.	61,200
	To Vendor	A/c	Cr.		61,200
b)	Cost of Goods Sold	A/c	Dr.	73,200
	To Profit & Loss	A/c	Cr.		73,200
c)	Salaries & Wages	A/c	Dr.	156,800
	To Bank	A/c	Cr.		156,800
d)	Utility Charges	A/c	Dr.	18,000
	To Bank	A/c	Cr.		18,000
e)	Depriciation	A/c	Dr.	6,000
	To Allowance for Depriciation	A/c	Cr.		6,000