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Application—Week 5


Part 2: Conversion of Enterprise Fund to Business-Type Activities

Town of Blue uses a fiscal year ended December 31. Following is the trial balance for Town of Blue Enterprise Funds for 2010

             Debits ($)               Credits ($)
Cash                550,000
Accounts Receivable                800,000
Allowance for uncollectible accounts                  12,500
Due from Other Enterprise Funds                125,000
Inventory                101,000
Land                880,000
Buildings             1,290,000
Accumulated Depreciation – Buildings                129,125
Equipment                606,000
Accumulated Depreciation – Equipment                    1,200
Vouchers Payable                652,125
Due to Other Enterprise Funds                125,000
Deferred Grant Revenues                176,825
Bonds Payable             1,500,000
Unamortized discount on bonds                125,000
Net Assets             1,696,025
Charges for Services
Water and Sewer                425,000
Transit Authority                125,000
Parks and Recreation                  55,000
Transfers from General Fund                  99,000
Investment Income                  10,100
Gain on the sale of equipment                    1,200
Water and Sewer Expenses                325,000
Transit Authority Expenses                131,000
Parks and Recreation Expenses                  75,100
 $          5,008,100  $          5,008,100

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Application—Week 5




Part 1: Preparation of Statement of Activities for a Township


Cala Township uses a fiscal year ending on April 30. The following information is available for preparation of the statement of activities for Cala Township for 2010


    Dollars ($)
General property tax revenues  3,000,000
Unrestricted grant revenues                    1,500,000
Grants restricted to education                  750,000
Capital grants restricted for transportation                  900,000
General government                  350,000
Public safety                  150,000
Education                  450,000
Transportation                  679,000
Interest on loan for governmental activities                    35,000
Transfers to Enterprise Funds                  880,000
Water Enterprise Fund
Charges for services                  550,000
Expenses                  335,000
Tornado loss on general government building that was destroyed                  150,000
Net Assets, governmental activities, beginning balance                1,250,000
Net Assets, business type activities, beginning balance                  786,000

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