Question

The Town of Weston has a Water Utility Fund with the following trial balance as of July 1, 2016, the first day of the fiscal year:

	Debits			Credits
Cash	$	338,000
Customer accounts receivable		204,800
Allowance for uncollectible accounts				$	30,800
Materials and supplies		123,200
Restricted assets (cash)		256,000
Utility plant in service		7,009,000
Accumulated depreciation—utility plant					2,609,000
Construction work in progress		108,000
Accounts payable					129,600
Accrued expenses payable					81,100
Revenue bonds payable					3,509,000
Net position					1,679,500
Totals	$	8,039,000		$	8,039,000

During the year ended June 30, 2017, the following transactions and events occurred in the Town of Weston Water Utility Fund:

1. Accrued expenses at July 1 were paid in cash.
2. Billings to nongovernmental customers for water usage for the year amounted to $1,387,000; billings to the General Fund amounted to $114,000.
3. Liabilities for the following were recorded during the year:

Materials and supplies	$	194,000
Costs of sales and services		368,000
Administrative expenses		207,000
Construction work in progress		226,000

4. Materials and supplies were used in the amount of $284,000, all for costs of sales and services.
5. $14,500 of old accounts receivable were written off.
6. Accounts receivable collections totaled $1,514,000 from nongovernmental customers and $49,900 from the General Fund.
7. $1,067,000 of accounts payable were paid in cash.
8. One year’s interest in the amount of $180,500 was paid.
9. Construction was completed on plant assets costing $256,000; that amount was transferred to Utility Plant in Service.
10. Depreciation was recorded in the amount of $266,100.
11. Interest in the amount of $25,600 was reclassified to Construction Work in Progress. (This was previously paid in item 8.)
12. The Allowance for Uncollectible Accounts was increased by $10,000.
13. As required by the loan agreement, cash in the amount of $108,000 was transferred to Restricted Assets for eventual redemption of the bonds.
14. Accrued expenses, all related to costs of sales and services, amounted to $97,000.
15. Nominal accounts for the year were closed.

Required:
a. Record the transactions for the year in general journal form.
b. Prepare a Statement of Revenues, Expenses, and Changes in Fund Net Position.
c. Prepare a Statement of Net Position as of June 30, 2017.
d. Prepare a Statement of Cash Flows for the year ended June 30, 2017. Assume all debt and interest are related to capital outlay. Assume the entire construction work in progress liability (see item 3) was paid in entry 7. Include restricted assets as cash and cash equivalents.

Answer 1

The question is very long and requires a lot of calculations.I was able to complete the first three parts within the available time.

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Part a)

The transactions for the year in general journal form are prepared as below:

Town of Weston
Water Utility Fund
General Journal
July 1, 2016 to June 30, 2017
Transaction	Account Titles	Debit	Credit
1)	Accrued Expenses	$81,100
	Cash		$81,100
2)	Customer Accounts Receivable	$1,387,000
	Due from Other Funds	$114,000
	Operating Revenues - Charges for Sales and Services		$1,501,000
3)	Materials and Supplies	$194,000
	Operating Expenses - Cost of Sales and Services	$368,000
	Operating Expenses - Administration	$207,000
	Construction Work in Progess	$226,000
	Accounts Payable		$995,000
4)	Operating Expenses - Cost of Sales and Services	$284,000
	Materials and Supplies		$284,000
5)	Allowance for Uncollectible Accounts	$14,500
	Customer Accounts Receivable		$14,500
6)	Cash	$1,563,900
	Customer Accounts Receivable		$1,514,000
	Due from Other Funds		$49,900
7)	Accounts Payable	$1,067,000
	Cash		$1,067,000
8)	Nonoperating Expenses - Interest	$180,500
	Cash		$180,500
9)	Utility Plant In Service	$256,000
	Construction Work in Progess		$256,000
10)	Operating Expenses - Depreciation	$266,100
	Accumulated Depreciation of Utility Plant		$266,100
11)	Construction Work in Progess	$25,600
	Nonoperating Expenses - Interest		$25,600
12)	Operating Revenues - Charges for Sales and Services	$10,000
	Allowance for Uncollectible Accounts		$10,000
13)	Restricted Assets	$108,000
	Cash		$108,000
14)	Operating Expenses - Cost of Sales and Services	$97,000
	Accrued Expenses		$97,000
15)	Operating Revenues - Charges for Sales and Services (1,501,000 - 10,000)	$1,491,000
	Operating Expenses - Cost of Sales and Services (368,000 + 284,000 + 97,000)		$749,000
	Operating Expenses - Administration		$207,000
	Operating Expenses - Depreciation		$266,100
	Nonoperating Expenses - Interest (180,500 - 25,600)		$154,900
	Net Position		$114,000

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Part b)

The statement of revenues, expenses, and changes in fund net position is given as below:

Town of Weston
Water Utility Fund
Statement of Revenues, Expenses and Changes in Fund Net Position
For the Year Ended June 30, 2017
Operating Revenues:
Charges for Sales and Services		1,491,000
Operating Expenses:
Cost of Sales and Services	749,000
Administration	207,000
Depreciation	266,100
Total Operating Expenses		1,222,100
Operating Income		268,900
Nonoperating Revenues (Expenses):
Interest on Long Term Debt		154,900
Change in Net Position		114,000
Net Position - July 1, 2016		1,679,500
Net Position - June 30, 2017		1,793,500

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Part c)

The statement of net position as of June 30, 2017 is prepared as below:

Town of Weston
Water Utility Fund
Statement of Net Position
As of June, 2017
Assets:
Current and Accrued Assets:
Cash (338,000 - 81,100 + 1,563,900 - 1,067,000 - 180,500 - 108,000)		465,300
Customer Accounts Receivable (204,800 + 1,387,000 - 14,500 - 1,514,000)	63,300
Less Allowance for Uncollectible Accounts (30,800 - 14,500 + 10,000)	-26,300
		37,000
Due from Other Funds (114,000 - 49,900)		64,100
Materials and Supplies (123,200 + 194,000 - 284,000)		33,200
Total Current and Accrued Assets			599,600
Other Property and Investments:
Restricted Assets (256,000 + 108,000)			364,000
Utility Plant:
Utility Plant In Service (7,009,000 + 256,000)	7,265,000
Less Accumulated Depreciation (2,609,000 + 266,100)	-2,875,100
Utility Plant - Net		4,389,900
Construction Work in Progess (108,000 + 226,000 - 256,000 + 25,600)		103,600
Net Utility Plant			4,493,500
Total Assets			5,457,100
Liabilities:
Current Liabilities:
Accounts Payable (129,600 + 995,000 - 1,067,000)		57,600
Accrued Expenses (81,100 - 81,100 + 97,000)		97,000
Total Current Liabilities		154,600
Long-Term Debt:
Revenue Bonds Payable		3,509,000	3,663,600
Net Assets:
Invested in Capital Assets, Net of Related Debt (4,493,500 - 3,509,000)		984,500
Restricted		364,000
Unrestricted (5,466,100 - 3,663,600 - 984,500 - 364,000)		445,000
Total Net Assets			1,793,500