The following Statement of Cash Receipts and Disbursements was prepared by the b
ID: 2458432 • Letter: T
Question
The following Statement of Cash Receipts and Disbursements was prepared by the bookkeeper of the City of McMurray Museum of Science. The museum is a component unit of the City of McMurray and must be included in the city’s financial statements. It began operations on January 1, 2012 with no liabilities or commitments and only two assets. (1) $12,000 in cash and (2) Land that was acquired for $25,000. Cash Basis 12 months Cash Receipts: Admission Fees $320,600 Loan from the Bank $60,000 Total deposits $380,600 Cash Disbursements: Supplies $71,000 Wages 124,000 Utilities 52,000 Purchase of Equipment 90,000 Interest on the Bank Loan 1,500 Total checks $338,500 Excess of Receipts Over Disbursements $ 42,100 Additional Information: • The loan from the bank is dated April 1 and is for a five-year period. Interest (5% annual rate) is paid on Oct. 1 and April 1 of each year, beginning Oct. 1, 2012. • The equipment was purchased on April 1, 2012 with the proceeds provided by the bank loan and has an estimated useful life of 12 years (please use the straight-line method of depreciation) for computing depreciation on the equipment. • Supplies on-hand amounted to $5,400 at December 31, 2012. • All other bills and salaries related to 2012 had been paid by the close of business on December 31. Required: Please prepare a Statement of Revenues, Expenses, and Changes in Net Assets for the year ended December 31, 2012 assuming the city plans to account for its activities on the accrual basis
Explanation / Answer
City of McMurray Museum of Science Statement of Revenues, Expenses, and Changes in Net Assets For the Year Ended December 31, 2012
Operating Revenues: Charges for Services $320,600 Operating Expenses: Wages $(124,000) Supplies ($71,000-$5,400) $ (65,600) Utilities $52,000 Depreciation (90,000/10*9/12)$6,750 Total Operating Expenses $248,350 Non-Operating Expenses: Interest $1,500 + ($60,000*5%*3/12) $($3,000)
Change in Net Assets Net Assets as on Dec. 31, 2012
$(37000-60000+90000+5400-5625+42100)
$108875