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Akron Established an Internal Service Fund for Its Data Processing

question 41

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:

First-level

The initial or primary stage in a process, sequence, or hierarchy.

Observation Experience

The act of closely monitoring or noticing phenomena as they occur, typically used in the context of learning or gathering data.

Inpatient Units

Hospital or healthcare facility sections designated for patients admitted for overnight stays or longer-term care.

Situational Leadership

A leadership style theory that proposes the most effective leadership strategy varies according to situational variables and the maturity level of the followers.