The City of Sandwich purchased a swimming pool from a private operator as of April 1, 2012, for $500,000. Of the $500,000, $250,000 was provided by a one-time contribution from the General Fund, and $250,000 was pro- vided by a loan from the First National Bank, secured by a note. The loan has an annual interest rate 6 percent, payable semiannually on October 1 and April 1; principal payments of $100,000 are to be made annually, beginning on April 1, 2013. The city has a calendar year as its fiscal year. During the year ended December 31, 2012, the following transactions occurred, related to the City of Sandwich Swimming Pool:
The amounts were received from the City General Fund and the First National Bank.
A short-term loan was provided in the amount of $100,000 from the Water Utility Fund.
The purchase of the pool was recorded. Based on an appraisal, it was decided to allocate $100,000 to the land, $300,000 to improvements other than buildings (the pool), and $100,000 to the building. There is a 10-year life for both the pool and the building, and depreciation is to be recorded annually, based on monthly allocations (do not record depre- ciation until entry 10).
Charges to patrons during the season amounted to $340,000, all received in cash.
Salaries paid to employees amounted to $200,000, all paid in cash, of which $170,000 was cost of services, and $30,000 was administration.
Supplies purchased amounted to $40,000; all but $5,000 was used. Cash was paid for the supplies, all of which was for cost of sales and services.
Administrative expenses amounted to $12,000, paid in cash.
The first interest payment was made to the First National Bank.
The short-term loan was repaid to the Water Utility Fund.
Depreciation was accrued for the year. Record 9/12 of the annual amounts.
Interest was accrued for the year.
Closing entries were prepared.
Required:
1. Prepare entries to record the transactions.
2. Prepare a Statement of Revenues, Expenses, and Changes in Fund Net Assets for the Year Ended December 31, 2012, for the City of Sandwich Swimming Pool Fund.
3. Prepare a Statement of Net Assets as of December 31, 2012, for the City of Sandwich Swimming Pool Fund.
4. Prepare a Statement of Cash Flows for the Year Ended December 31, 2012, for the City of Sandwich Swimming Pool Fund.