c. Edgerton County has a duplication service center that it accounts for in an i

Question

c. Edgerton County has a duplication service center that it accounts for in an internal service fund. During 2015 Edgerton County duplication service center had the following transactions:

1. The general fund made an initial cash contribution of $35,000 to the internal service fund.               

2. The Edgerton County duplication service center purchased copiers that were accounted for as Equipment and paid cash in the amount of $70,000.

3. The Edgerton County duplication service center borrowed $270,000 from a local bank to finance the purchase of additional equipment and renovation of its facilities. It issued a three-year note.

4. The Edgerton County duplication service center purchased the equipment for $160,000 and paid contractors $100,000 for improvements to its facilities – cash was paid.

5. The Edgerton County duplication service center billed the county clerk’s office $5,000 for printing services; the duplication service center then received $2,500 cash from the county clerk’s office.

6. The Edgerton County duplication service center incurred and paid in cash operating expenses for $9,000.                                             

7. The Edgerton County duplication service center recognized depreciation in the amount of $1,500 on its equipment and recognized depreciation in the amount of $900 on the improvements to its facilities

b. Which financial statements would be required for Edgerton County duplication service center for the year ended July 31, 2015? State the titles and show the general format of the classifications that would be reported in each of the required financial statement.

Explanation / Answer

1. Statement of Affairs

2. Statement of Profit and Loss Account

3. Cash Flow Statement

Depreciation: 2400 (1500+900)

Equipments: 260000 (160000+100000)

Liabilities Amount Assets Amount Capital 35000 Equipments 260000 Less:Loss -6400 Depreciation -2400 Borrowings 270000 Copiers 70000 Receivables 2500 Cash -31500 Total 298600 Total 298600

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