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Akron Established an Internal Service Fund for Its Data Processing

question 69

Essay

Akron established an internal service fund for its data processing activities on July 1, 20X8. During the fiscal year ended June 30, 20X9, the following transactions and events occurred:

1) On July 1, 20X8, the city council authorized the general fund to contribute $1,000,000 to help establish the internal service fund on July 20, 20X8.
2) The internal service fund spent $900,000 of the contribution to acquire a mainframe computer on July 25, 20X8.
3) During the year ended June 30, 20X9, the internal service billed other funds of the city $300,000 for use of the computer. By year end, all of the billings were collected except for $30,000.
4) The internal service fund incurred general operating expenses of $100,000, exclusive of depreciation, during the year ended June 30, 20X9. All of the expenses were paid by June 30, 20X9, except for $24,000.
5) Depreciation expense related to the computer was $180,000.

Required:
A)Prepare all journal entries that would be recorded by Akron's internal service fund for the year ended June 30,20X9.Explanations for journal entries are not necessary.
B)Prepare a statement of revenues,expenses,and changes in fund net assets for the internal service fund for the year ended June 30,20X9.
C)Calculate the amount of unrestricted net assets at June 30,20X9.

Definitions:

Astrology

The study of the movements and relative positions of celestial bodies interpreted as having an influence on human affairs and the natural world.

Nonscientific Belief

A belief system or opinion that is not based on the scientific method or empirical evidence, often found in cultural, religious, or personal beliefs.

Universal Gravitation

The law of physics that states that every particle attracts every other particle in the universe with a force that is direct between the masses and inversely proportional to the square of the distance between their centers.

Newton

Refers to Sir Isaac Newton, an English physicist, mathematician, and astronomer who is widely recognized as one of the most influential scientists of all time, especially for formulating the laws of motion and universal gravitation.