1a. Prepare a budget on the full accrual basis for the City of Davidson Motor Pool Fund according to the steps below:
Can you break this up as follows:
1a1. What are the amounts to be entered in the budget for the following:
Fuel and Supplies
1a2. What are the amounts to be entered in the budget for the following (please show the math):
1a3. What are the amounts to be entered in the budget for the following (show your math):
Payment on loan
1a4. Format the above info into a budget (simply list the items and amounts already calculated and then total).
1b. Compute the mileage charge needed to permit the Motor Pool to break even on operations and to make the required principal payment of $200,000, assuming the automobiles will travel 3,750,000 miles during the year.
The City of Davidson decided to open a motor pool to provide transportation service for all departments. During the first year, July 1, 2008, through June 30, 2009, only passenger cars will be available, and a uniform mileage rate will be charged.
A permanent contribution of $1,500,000 cash was received from the General Fund and a $1,000,000 long-term loan was received from the Enterprise Fund to support the purchase of fixed assets. Interest at the rate of 6 percent per year is to be paid on the unpaid balance of the loan; principal in the amount of $200,000 is to be repaid each year.
At the beginning of the first year, the following are purchased for cash: land, $100,000; buildings (30-year life), $300,000; equipment (5-year life), $150,000; automobiles (4-year life), $1,600,000; and fuel and supplies, $100,000. Depreciation expense is to be computed by the straight-line method, assuming no salvage value.
During the first year, salaries are expected to amount to $265,000, and the cost of fuel and supplies used is expected to amount to $250,000.
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This solution provides a complete computation of the given accounting problem formatted in Excel.