Arlington Town uses an Internal Service Fund to account for its motor pool activities. You have the following information: Automobiles: The Motor Pool uses two 6-passenger vans, each costing $90,000 and each estimated to have a 5-year life when they were acquired in 2020. Driver salaries: The Motor Pool has a driver-administrator, who earns $90,000 a year, and a driver, who earns $70,000. The town uses a rate of 33 percent (to cover benefits, including pensions) for planning purposes. Insurance: In 2020, the town purchased a 3-year automobile accident policy at a cost of $12,000. Fuel and maintenance costs: Based on experience, the driver-administrator estimates that total fuel and maintenance costs for the year will be $16,000. Billing units: To simplify its record keeping, the Motor Pool charges a fixed price per trip. Arlington’s budget office estimates it will provide 1,600 trips to the town’s departments in 2021. Arlington Town had the following transactions and events during January 2021: 1. Paid salaries for the month in cash. (Driver-administrator and driver) 2. Paid $1,300 cash for fuel and maintenance expenses 3. Recorded depreciation expense for the month. 4. Accrued benefits expense for the month 5. Recorded insurance expense for the month 6. Billed for motor vehicle services as follows: General Fund, 160 trips; Golf Course Enterprise Fund, 20 trips. Using the information above, prepare journal entries for the January transactions.
Arlington Town uses an Internal Service Fund to account for its motor pool
activities. You have the following information:
Automobiles: The Motor Pool uses two 6-passenger vans, each costing $90,000
and each estimated to have a 5-year life when they were acquired in 2020.
Driver salaries: The Motor Pool has a driver-administrator, who earns $90,000
a year, and a driver, who earns $70,000.
The town uses a rate of 33 percent (to cover benefits, including pensions)
for planning purposes.
Insurance: In 2020, the town purchased a 3-year automobile accident policy
at a cost of $12,000.
Fuel and maintenance costs: Based on experience, the driver-administrator
estimates that total fuel and maintenance costs for the year will be $16,000.
Billing units: To simplify its record keeping, the Motor Pool charges a fixed price
per trip. Arlington’s budget office estimates it will provide 1,600 trips to the
town’s departments in 2021.
Arlington Town had the following transactions and events during January 2021:
1. Paid salaries for the month in cash. (Driver-administrator and driver)
2. Paid $1,300 cash for fuel and maintenance expenses
3. Recorded
4. Accrued benefits expense for the month
5. Recorded insurance expense for the month
6. Billed for motor vehicle services as follows: General Fund, 160 trips;
Golf Course Enterprise Fund, 20 trips.
Using the information above, prepare
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