An internal service fund had the following transactions during the year ended June 30,2009,its first year of existence:
(1)Received $1,000,000 contribution from the general fund.
(2)Acquired fleet of cars for $950,000,paying cash.
(3)Billed departments in other funds $500,000 for using cars.
(4)Incurred operating costs,exclusive of depreciation,of $240,000.
(5)Depreciation expense amounted to $250,000.
-Refer to the above information.On the internal service fund's balance sheet on June 30,2009,total net assets should be reported at:

Question

Quizplus · Accepted Answer

Total net assets of an internal service fund are calculated as the difference between total assets and total liabilities.

Total assets: 
- $1,000,000 contribution 
- Fleet of cars worth $950,000 
- Accounts receivable of $500,000 (billed departments for car use)

Total liabilities: None given in the information provided.

Therefore, total net assets are: 
$1,000,000 + $950,000 + $500,000 - $240,000 - $250,000 = $1,010,000.

Option B is the correct answer.

An Internal Service Fund Had the Following Transactions During the Year