Question

During the current year, the Town of Falmouth had a number of transactions that affected net position of its town skating rink, which is operated as an enterprise fund. You are provided with the following information:

1. The beginning net position balances are net investment in capital assets, $679,600; restricted, $0; and unrestricted, $1,354,294.
2. Net income for the year was $162,712.
3. Depreciation expense totaled $53,985.
4. A piece of equipment with a carrying value of $26,000 was sold for $24,900.
5. Bonds for $500,000 were issued to construct a concession stand at the rink. At the end of the year, the concession stand was 50 percent complete, and construction work in progress totaled $247,980.
6. A $14,998 principal payment was made on a lease obligation.
7. A new Zamboni ice resurfacing machine was purchased for $240,000. At the end of the year, a $29,900 note associated with the machine remains outstanding.

Required

Prepare the net position section of Falmouth’s statement of net position.

Net Position
Net Position - Net investment in capital assets ????
Net Position - Restricted ????
Net Position - Unrestricted ?????
Total net position ?????

Answer 1

TOWN OF FALMOUTH STATEMENT OF NET POSITION
NET POSITION:
NET POSITION—NET INVESTMENT IN CAPITAL ASSETS	855713
NET POSITION—RESTRICTED	252020
NET POSITION—UNRESTRICTED	1088573
TOTAL NET POSITION	$2196306

Calculations:

Net investment in capital assets:
Beginning balance	679600
- Depreciation	53985
- Sale of equipment	24900
+ Capital lease payment	14998
+ New equipment	240000
Ending balance	$855713

Restricted:
Beginning balance	0
+ Restricted for construction (500000-247980)	252020
Ending balance	252020

Unrestricted:
Beginning balance	1354294
+ Net income	162412
- Increase in net investment in capital assets (855713-679600)	176113
- Increase in restricted	252020
Ending balance	1088573