Assume that a Central Automotive Equipment Fund has been cre

Assume that a Central Automotive Equipment Fund has been created and that some of the assets needed have been acquired. This fund’s balance sheet follows:

Central Automotive Equipment Internal Service Fund

Balance Sheet

December 31, 2015

       Assets:

           Current Assets:  

               Cash       $ 75,000

           Fixed Assets:

               Land       10,000

               Buildings   40,000

               Machinery & Equipment   10,000

                   total assets   $ 135,000

       Net Assets:

           Unrestricted   $ 135,000

Transactions during the year:

1.    Purchased equipment by paying $25,000 cash and issuing a two-year, 6% note for $15,000 on October 1.

2.       Materials and supplies purchased on credit, $10,000.

3.       Salaries and wages paid, $19,000, distributed as follows:

           Mechanics’ wages   $ 9,000

           Indirect labor   3,000

           Superintendent’s salary   3,500

           Office salaries   3,500

4.       Heat, light, and power paid, $2,000.

5.       Depreciation:

           Buildings   $2,400

           Machinery & Equipment   9,200

6.       Total billings to departments for services rendered, $42,800, of which $30,000 is payable from the General Fund and $12,800 is payable from the Enterprise Fund.

7.       Vouchers of $7,500 were paid.

8.       Cash collected from the General Fund, $29,000 and from the Enterprise Fund, $10,000.

9.       Office maintenance expenses paid, $200.

10.       Materials and supplies issued during the period, $7,000.

11.       Accrued salaries and wages, $1,000, distributed as follows:

           Mechanics’ wages   $500

           Indirect labor   150

           Superintendent’s salary   175

           Office salaries   175

12.       Interest was accrued on the note.

13.       Closing entries were recorded.

Record the transactions (above) in a general journal and you’re your entries to a general ledger.

Solution

Solution:

Machinery and Equipment

40,000

           Notes payable

15,000

           Cash

25,000

Inventory of material and supplies

10,000

           Vouchers payable               

10,000

Expenses – mechanic wages

9,000

Expenses – Indirect labor

3,000

Expenses – Superintendent’s salary

3,500

Expenses – Office salaries

3,500

               Cash

19,000

Expenses – Heat, light and power

2,000

           Cash

2,000

Expenses – Depreciation building

2,400

Expenses – Depreciation machinery and equipment

9,200

             Accumulated depreciation - building

2,400

             Accumulated depreciation – machinery and equipment

9,200

Due from general fund

30,000

Due from enterprise fund

12,800

                Revenues billing to department

42,800

Expenditures - Operating

30,000

        Due to CAEF

30,000

Expenses - Automotive

12,800

        Due to CAEF

12,800

Vouchers payable

7,500

            Cash

7,500

Cash

39,000

Due from general fund

29,000

Due from enterprise fund

10,000

Due to CAEF

29,000

       Cash

29,000

Due to CAEF

10,000

       Cash

10,000

Expenses – Office Maintenance

200

               Cash

200

Expenses – Cost of materials and supplies used

7,000

               Inventory of materials and supplies used

7,000

Expenses - Interest

400

Expenses – Mechanics wages

500

Expenses – Indirect labor

150

Expenses – Superintendent’s salary

175

Expenses – office salaries

175

          Accrued interest payable

400

          Accrued salaries and wages payable

1000

	Machinery and Equipment	40,000
	Notes payable		15,000
	Cash		25,000
	Inventory of material and supplies	10,000
	Vouchers payable		10,000
	Expenses – mechanic wages	9,000
	Expenses – Indirect labor	3,000
	Expenses – Superintendent’s salary	3,500
	Expenses – Office salaries	3,500
	Cash		19,000
	Expenses – Heat, light and power	2,000
	Cash		2,000
	Expenses – Depreciation building	2,400
	Expenses – Depreciation machinery and equipment	9,200
	Accumulated depreciation - building		2,400
	Accumulated depreciation – machinery and equipment		9,200
	Due from general fund	30,000
	Due from enterprise fund	12,800
	Revenues billing to department		42,800
	Expenditures - Operating	30,000
	Due to CAEF		30,000
	Expenses - Automotive	12,800
	Due to CAEF		12,800
	Vouchers payable	7,500
	Cash		7,500
	Cash	39,000
	Due from general fund		29,000
	Due from enterprise fund		10,000
	Due to CAEF	29,000
	Cash		29,000
	Due to CAEF	10,000
	Cash		10,000
	Expenses – Office Maintenance	200
	Cash		200
	Expenses – Cost of materials and supplies used	7,000
	Inventory of materials and supplies used		7,000
	Expenses - Interest	400
	Expenses – Mechanics wages	500
	Expenses – Indirect labor	150
	Expenses – Superintendent’s salary	175
	Expenses – office salaries	175
	Accrued interest payable		400
	Accrued salaries and wages payable		1000