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Exercise 7-25 (Algo) Enterprise Fund Journal Entries and Financial Statements [LO 7-5]

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Following is the June 30, 2022, statement of net position for the City of Bay Lake Water Utility Fund.

CITY OF BAY LAKE
Water Utility Fund
Statement of Fund Net Position
June 30, 2022
Assets
Current assets:
Cash and investments					$	1,775,528
Accounts receivable (net of $13,371 provision for uncollectible accounts)						306,961
Accrued utility revenue						500,100
Due from General Fund						29,317
Interest receivable						82,017
Total current assets						2,693,923
Restricted assets:
Cash						9,196
Capital assets:
Land	$	1,781,527
Buildings (net of $3,421,119 in accumulated depreciation)		5,216,114
Machinery and equipment (net of $5,131,608 in accumulated depreciation)		8,491,176
Total capital assets (net)						15,488,817
Total Assets						18,191,936
Liabilities
Current liabilities:
Accounts payable		532,216
Interest payable		131,814
Current portion of long-term debt		403,000
Total current liabilities						1,067,030
Liabilities payable from restricted assets:
Customer deposits						9,196
Long-term liabilities:
Revenue bond payable						11,687,000
Total Liabilities						12,763,226
Net Position
Net investment in capital assets						3,409,038
Unrestricted						2,019,672
					$	5,428,710

Following is the information of the Water Utility Fund for fiscal year 2023.

The amount in the Accrued Utility Revenue account was reversed.

Billings to customers for water usage during fiscal year 2023 totaled $2,936,889; $190,898 of the total was billed to the General Fund.

Cash in the amount of $256,020 was received. The cash was for interest earned on investments and $80,745 in accrued interest.

Expenses accrued for the period were management and administration, $354,891; maintenance and distribution, $678,554; and treatment plant, $684,595.

Cash receipts for customer deposits totaled $2,391.

Cash collections on customer accounts totaled $2,899,742, of which $206,423 was from the General Fund.

Cash payments for the period were as follows: Accounts Payable, $1,440,900; interest (which includes the interest payable), $390,043; bond principal, $403,000; machinery and equipment, $587,802; and return of customer deposits, $918.

A state grant amounting to $478,126 was received to help pay for new water treatment equipment.

Accounts written off as uncollectible totaled $10,079.

The utility fund transferred $805,274 in excess operating income to the General Fund.

Adjusting entries for the period were recorded as follows: depreciation on buildings was $241,637 and on machinery and equipment was $362,455; the allowance for uncollectible accounts was increased by $15,012; an accrual for unbilled customer receivables was made for $704,647; accrued interest income was $15,954; and accrued interest expense was $61,814.

The Revenue Bond Payable account was adjusted by $403,000 to record the current portion of the bond.

Closing entries and necessary adjustments were made to the net position accounts.

Exercise 7-25 (Algo) Part c

Prepare a statement of net position for the Water Utility Fund as of June 30, 2023.

CITY OF BAY LAKE Water Utility Fund Statement of Net Position June 30, 2023 Assets Current Assets: Cash and Investments Accounts Receivable Accrued Utility Revenue Due from General Fund Interest Receivable Total Current Assets $0 Restricted Assets: Cash Capital Assets: Land Buildings Machinery and Equipment Total Capital Assets 0 Total Assets $0 Liabilities Current Liabilities: Accounts Payable Interest Payable Current Portion of Long-Term Debt Total Current Liabilities 0 Liabilities Payable from Restricted Assets: Customer Deposits Long-Term Liabilities: Revenue Bond Payable Total Liabilities $0 Net Position Net Investment In Capital Assets Unrestricted Total Net Position $0

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