The City of Clifton provides electric energy for its citizens

The City of Clifton provides electric energy for its citizens through an operating department. All
transactions of the Electric Department are recorded in a self-sustaining fund supported by
revenues from the sales of energy. Plant expansion is financed by the issuance of bonds that
are repaid out of revenues. All cash of the Electric Department is held by the city treasurer.
Receipts from customers and others are deposited in the treasurer’s account. Disbursements
are made by drawing warrants on the treasurer.The following is the postclosing trial balance of
the department as of June 30, 20X7:During the year ended June 30, 20X8, the department had
the following transactions:1. Sales of electric energy, $10,700,000.2. Purchases of fuel and
operating supplies, $2,950,000.3. Construction expenditures relating to miscellaneous system
improvements in progress (financed from operations), $750,000.4. Fuel consumed,
$2,790,000.5. Miscellaneous plant additions and improvements constructed and placed in
service at midyear, $1,000,000.6. Wages and salaries paid, $4,280,000.7. Sale at par on
December 31, 20X7, of 20-year, 5% Electric Revenue Bonds, dated January 1, 20X8, with
interest payable semiannually, $5,000,000.8. Expenditures out of bond proceeds for
construction of Clifton Steam Plant Unit No. 1, $2,800,000.9. Operating materials and supplies
consumed, $150,000.10. Payments received from customers, $10,500,000.11. Expenditures
out of bond proceeds for construction of Clifton Steam Plant Unit No. 2, $2,200,000.12.
Warrants drawn on city treasurer in settlement of accounts payable, $3,045,000.13. The Clifton
Steam Plant was placed in service June 30, 20X8.14. Interest on bonds paid during the year,
$500,000.Requireda. Prepare a worksheet for the Electric Department Fund showing:1. The
statement of net position amounts at June 30, 20X7.2. The transactions for the year and closing
entries.3. The statement of net position amounts at June 30, 20X8.b. Compute the correct June
30, 20X7, and June 30, 20X8, balances for each component of net position.c. Prepare a
Statement of Cash Flows for the Electric Department Fund for the year ended June 30,20X8.
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