James & Partners is helping Mansfield Town for its accounting record. The information received by James &
Question:
James & Partners is helping Mansfield Town for its accounting record. The information received by James & Partners is that Mansfield Town received sponsorship from businesses and other nonprofit organizations for a program that is operated by Mansfield Town. There are 2 sources of cash receipts from the program which are registration fees of $58,600 (paid by sponsors) and cash loan from bank of $25,600. As for the cash disbursements for the program, it incurred payroll taxes of $6,000; labor of $14,200; insurance of $2,800; interest of $480, and; purchase of van of $35,000. Mr James has asked Jerry the followings:
i. To show the correct journal entries to record revenues and disbursements if the city treats the program as an enterprise fund.
ii. To show the correct journal entries to record revenues and disbursements if the city treats the program as an special revenue fund.
iii. To identify the situation when the town should record revenues and disbursements as special revenue funds instead of enterprise funds.
