During 2017, the Town of Falmouth had a number of transactions that affected net
ID: 2502076 • Letter: D
Question
During 2017, the Town of Falmouth had a number of transactions that affected net position of its town skating rink, which is operated as an enterprise fund. You are provided with the following information for 2017:
1. The beginning net position balances are: net investment in capital assets, $679,800; restricted, $0; and unrestricted, $1,354,692.
2. Net income for the year was $162,759.
3. Depreciation expense totaled $54,000.
4. A piece of equipment with a carrying value of $26,100 was sold for $25,000.
5. Bonds for $500,000 were issued to construct a concession stand at the rink. At the end of the year, the concession stand was 50 percent complete, and construction work in progress totaled $248,000.
6. A $15,000 principal payment was made on a capital lease.
7. A new Zamboni ice resurfacing machine was purchased for $250,000. At the end of the year, a $30,000 note associated with the machine remains outstanding.
Required Prepare the net position section of Falmouth’s 2017 statement of net position.
Explanation / Answer
STATEMENT OF NET POSITION NET POSITION NET POSITION—NET INVESTMENT IN CAPITAL ASSETS 8,64,700 NET POSITION—RESTRICTED 2,52,000 NET POSITION—UNRESTRICTED 10,80,551 TOTAL NET POSITION 21,97,251 Net investment in capital assets: Beginning balance 6,79,800 Less Depreciation 54,000 Less Sale of equipment 26,100 ADD Capital lease payment 15,000 ADD New equipment (zamboni) 2,50,000 Ending balance 8,64,700 Restricted Beginning balance 0 Restricted for construction ($500,000-248,000) 2,52,000 Ending balance 2,52,000 Unrestricted: Beginning balance 13,54,692 ADD Net income 1,62,759 Less Increase In Net investment In capital assets 1,84,900 Less Increase in restricted 2,52,000 Ending balance 10,80,551