35 The City of Sandwich purchased a swimming pool from a private operator as of April 1, 2020, for $400,000, of which $200,000 was provided by a one-time contribution from the General Fund, and $200,000 was provided by a loan from the First National Bank, secured by a note. The loan has an annual interest rate of 6 percent, payable semiannually on October 1 and April 1; principal payments of $100,000 are to be made annually, beginning on April 1, 2021. The city has a calendar year as its fiscal year. During the year ended December 31, 2020, the following transactions occurred related to the City of Sandwich Swimming Pool: 1.The amounts were received from the City General Fund and the First National Bank. 2.A loan was provided in the amount of $125,000 from the Water Utility Fund to provide working capital. 3.The purchase of the pool was recorded. Based on an appraisal, it was decided to allocate $100,000 to the land, $200,000 to improvements other than buildings (the pool), and $100,000 to the building 4. Charges to patrons during the season amounted to $242,000, all received in cash. 5. Salaries paid to employees amounted to $115,000, all paid in cash, of which $75,000 was cost of services and $40,000 was administration. 6.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. 7.Administrative expenses amounted to $16,500, paid in cash. 8.The first interest payment was made to the First National Bank. 9.The short-term loan was repaid to the Water Utility Fund. 10.Depreciation of $18,500 for the pool and $6,000 on the building was recorded for the nine months they were in operation. 11.Interest was accrued for the year. 12.Closing entries were prepared.
The City of Sandwich purchased a swimming pool from a private
operator as of April 1, 2020, for $400,000, of which $200,000 was
provided by a one-time contribution from the General Fund, and
$200,000 was provided by a loan from the First National Bank, secured
by a note. The loan has an annual interest rate of 6 percent, payable
semiannually on October 1 and April 1; principal payments of $100,000
are to be made annually, beginning on April 1, 2021. The city has a
calendar year as its fiscal year. During the year ended December 31,
2020, the following transactions occurred related to the City of
Sandwich Swimming Pool:
1.The amounts were received from the City General Fund and the First
National Bank.
2.A loan was provided in the amount of $125,000 from the Water Utility
Fund to provide
3.The purchase of the pool was recorded. Based on an appraisal, it
was decided to allocate $100,000 to the land, $200,000 to
improvements other than buildings (the pool), and $100,000 to the
building
4. Charges to patrons during the season amounted to $242,000,
all received in cash.
5. Salaries paid to employees amounted to $115,000, all paid in
cash, of which $75,000 was cost of services and $40,000 was
administration.
6.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.
7.Administrative expenses amounted to $16,500, paid in cash.
8.The first interest payment was made to the First National Bank.
9.The short-term loan was repaid to the Water Utility Fund.
10.Depreciation of $18,500 for the pool and $6,000 on the building
was recorded for the nine months they were in operation.
11.Interest was accrued for the year.
12.Closing entries were prepared.
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