The City of San Dominguez received a $800,000 federal grant to acquire several b

Question

The City of San Dominguez received a $800,000 federal grant to acquire several buses to be used in its public transit system. The City paid $400,000 to acquire several buses. At year-end, $100,000 of the grant had not yet been used. During the year total depreciation on the buses was $40,000. Revenues for the public system were $500,000; operating expenses (other than depreciation) were $450,000. Assuming the Public Transit Enterprise Fund began the year with unrestricted net assets of $420,000, prepare the following for the Public Transit Enterprise Fund.

A. Prepare the statement of Net Assets

Explanation / Answer

First prepare Cash a/c

Prepare Net Asset A/c

Receipts $ Federal grant 8,00,000 Revenue    5,00,000 Expenses Buses        4,00,000 Other expenses from grant        3,00,000 Operating expenses        4,50,000 Cash Balance        1,50,000

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