The General Fund of the City of Lansing made a permanent contribution of $100,000 to an internal service fund in 2012.Also,during the year,the internal service fund had revenues of $500,000,expenses of $475,000,and a transfer out of $10,000.Assuming this was the first year of operations for the internal service fund,the ending net assets balance,after closing entries,would be:

Question

Quizplus · Accepted Answer

The ending net assets balance is calculated by adding the initial contribution to the net income and subtracting any transfers out. The net income is $500,000 (revenues) - $475,000 (expenses) = $25,000. Adding the initial contribution of $100,000 gives $125,000. Subtracting the transfer out of $10,000 results in an ending net assets balance of $115,000.

The General Fund of the City of Lansing Made a Permanent