The investments in an Internal Service Fund had investments with an original cost of $100,000. As...
The investments in an Internal Service Fund had investments with an original cost of $100,000. As of the end of the fiscal year, the fair market value on these investments was $85,000. The Internal Service Fund would
Select one:
a. report expenses of $15,000.
b. report a reduction of revenue of $15,000.
c. not adjust the value of the investments reported on the balance sheet.
d. report a loss on investments of $15,000.
Homework Answers
OPTION B: Report a reduction of revenue of $15,000
EXPLANATION:
there is reduction of revenue to the extent $100000 - $85000 = $15000 on account of reduction in fair market value which needs to be reported.
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Question text
Internal Service Fund Financial Statements
At the beginning of fiscal year 2014, the City of Wooster
established a central supplies storehouse to service its several
funds. The general fund contributed $26,000,000 (nonrefundable) to
aid in the establishment of the supplies storehouse. It was agreed
that the storehouse would charge other funds for the purchase price
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Internal Service Fund Financial Statements
At the beginning of fiscal year 2014, the City of Wooster
established a central supplies storehouse to service its several
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aid in the establishment of the supplies storehouse. It was agreed
that the storehouse would charge other funds for the purchase price
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