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n200080 [17]
3 years ago
13

Explain the reporting requirements for internal service funds and enterprise funds. internal service funds and enterprise funds

are both proprietary funds, so why do their reporting requirements differ?
Business
1 answer:
yawa3891 [41]3 years ago
4 0

Answer: Enterprise Fund

An enterprise fund gets used for services the public gets on a person-by-person basis like water and sewage utilities. If your government provides a service to you, the enterprise fund accounts for the debits and credits.

Internal Service Fund

Paying for the costs accumulated by other funds is the internal service fund. They pay for the operational costs of serving other funds. For example, government vehicles, computers, or copiers are assets typically listed in an internal service fund.

Explanation: Their reporting requirements differs because:

-The internal service funds are reported in all of the proprietary fund financial statements in a separate column to the right of the total enterprise funds column. Major fund requirements do not apply to the internal service funds and their information is combined into one column.

- The internal service fund asset and liability balances that are not eliminated should be reported in the governmental activities column (unless the enterprise funds are predominant or only user of its services)

- Even though internal service funds are classified as proprietary funds, the nature of the activity accounted for in them is generally governmental and should normally be reported as governmental activities. The exception to this presentation is when the internal service funds serves predominantly external parties or enterprise funds. Then they should be reported together with the business-type activities.

- In the statement of activities the eliminations are necessary to remove the doubling effect of internal service fund activities. To accomplish that only the residual balances are reported. Internal revenues (except investment income) and expenses (except interest) should be netted. The difference should be charged back entirely or on pro-rata basis to the funds/functions that used services or acquired goods from that internal service fund (e.g., if the internal service fund reports net income, the entire amount should be charged back to the participating funds and would reduce their expenses related to the services and goods purchased from that fund).

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Consider the following information regarding a person's decision to go to college college tuition is $20,000 per year, room and
Ostrovityanka [42]

Answer:

$50,000

Explanation:

The computation of the cost of going the college is shown below:

= College tuition fees per year + boarding fees per year + books and materials charges per year + earnings while working

= $20,000 + $10,000 + $2,000 + $18,000

= $50,000

For computing the cost of going to the college we simply added the total cost that is mentioned in the question so that the accurate amount could come

7 0
3 years ago
Lena is a sole proprietor. In April of this year, she sold equipment purchased four years ago for $26,000 with an adjusted basis
viva [34]

Answer:

  1. Lena has a ORDINARY GAIN of $1,500 from the sale of the first equipment.
  2. Lena has a ORDINARY LOSS of $2,700 from the sale of the second equipment.

Explanation:

Lena sold the first equipment for $17,000, and that resulted in an ordinary gain = $17,000 - $15,500 = $1,500. This gain was due to a §1245 depreciation recapture.

Lena sold the second equipment for $5,500, and that resulted in an ordinary loss (§1231 loss) = $5,500 - $8,200 = $2,700.

7 0
2 years ago
How will you save money by buying a franchise?
RideAnS [48]

Answer:

B. You can get a volume discount on your products.

I hope this helps!

7 0
2 years ago
Knox Company has a new product with a projected selling price of $6.00 each. It estimates that it could sell 100,000 units annua
Pachacha [2.7K]

Answer:

350,000

And if done per unit, $3.50

Explanation:

Both sales and variable cost are dependent on the number of units sold.

The sales less the variable cost gives the contribution margin. The contribution margin less the fixed cost gives the net operating income.

The target cost of the product is the difference between the selling price and the anticipated profit.

Target cost per unit

= $6.00 - $2.50

= $3.50

Total Target cost = $3.50 * 100,000

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6 0
3 years ago
An investment property with 10 residential units rents for $2,000 per unit per month. The rate of vacancy and collection loss is
irinina [24]

Answer:

$1,815,000

Explanation:

First we must determine the gross income = $2,000 x 10 units x 12 months = $240,000

minus the vacancy rate = $240,000 x 5% = $12,000

minus the annual expense = $10,200

net income = $240,000 - $12,000 - $10,200 = $217,800

to calculate the maximum amount that the investor should pay we must divide the net income by the expected rate of return = $217,800 / 12% = $1,815,000

When you are calculating a project's price (buying this asset is an investment project), depreciation and debt service are not included in the calculations.  

5 0
2 years ago
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