An Internal Service Fund Had the Following Transactions During the Year

question 64

Multiple Choice

An internal service fund had the following transactions during the year ended June 30,20X9,its first year of existence:
(1) Received $1,000,000 contribution from the general fund.
(2) Acquired fleet of cars for $950,000,paying cash.
(3) Billed departments in other funds $500,000 for using cars.
(4) Incurred operating costs,exclusive of depreciation,of $240,000.
(5) Depreciation expense amounted to $250,000.
-Refer to the above information.On the internal service fund's balance sheet on June 30,20X9,total net assets should be reported at:

• A)$1,000,000.
• B)$1,010,000.
• C)$1,250,000.
• D)$910,000.

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Definitions:

Insignificant Influence

Refers to a situation where an investor does not have the power to govern the financial and operating policies of an investee, typically resulting in the investment being accounted for using the cost method or fair value method.

Stock Investments

Financial assets representing ownership interest in companies; shareholders may receive dividends and have voting rights.

Cash Dividends

Payments made by a corporation to its shareholders as a distribution of profits in the form of cash.

Net Income

The remaining profit for a company after removing all costs and tax obligations from the overall revenue.