Question

The City of Shelby had the following transactions related to the construction of a new courthouse.

(a) 1/2/2018: 20 year 5% General Obligation Serial Bonds with a face value of $6,000,000 are issued at 102. Interest and principal payments are made on Jan. 1 and July 1 of each year. The premium was transferred into the Debt Service Fund. The General Fund will fully fund each payment as they become due.
(b) 3/1/2018: Land is purchased for a new courthouse at a cost of $ 550,000.
(c) 3/1/2018: A contract is signed for construction of the new courthouse in the amount of $ 4,400,000.
(d) 6/15/2018: Cash sufficient to cover interest and principal payments for the year less the premium is transferred from the General Fund.
(e) 7/1/2018: Interest ($150,000) and principal ($150,000) are paid on the courthouse fund serial bonds.
(f) 12/1/2018: Receive an invoice for progress completed to date on the courthouse construction project in the amount of $2,700,000.
(g) 12/27/2018: $156,000 is transferred from the General Fund for the 1/1/2019 interest payment due on the courthouse fund serial bonds. Interest is accrued as of 12/31/2018, following the exception permitted by GASB.

Required: Prepare a Statement of Revenues, Expenditures and Changes in Fund Balance for the Capital Projects and Debt Service Funds. Assume this is the first year for each fund (beginning fund balances are zero) and the City has no other long-term debt than that described above. Use separate columns for the two funds

Answer 1

Please find the below table useful to compute desired results: -

E F Purchase of Land 550000 Receive of Invoice 2700000 Issue price of Bond 102 Face Value of Bond 6000000 3 Statement Of Revenue Expenditures. And Changes In Fund Balance Year Ended Dec. 31 capital projects fund bonds debt service fund 4 Revenue 5 Expenditures : 6 Capital outlay =F1+F2 7 Debt service 8 Interest =150000+156000 9 Principal 150000 10 Total expenditures =B6 =C8+C9 11 Excess (Deficiency) of revenues over expenditures 1=B4-B10 =C4-C10 12 Other financing sources (Uses): 13 Proceed of bonds =F48F3/100 14 Transfers in (out) =F4*(100-F3)/100 =-(C11+B14) 15 Total other financing sources =B13+B14 =C14 16 Net change in fund balance =B15-B10 =C15-C10 17 Fund balance-Jan. 1 18 Fund balance-Dec. 31 =B16+B17 =C16+C17

Ε Purchase of Land $550,000.00 Receive of Invoice $2,700,000.00 Issue price of Bond $102.00 Face Value of Bond $6,000,000.00 3 B C Statement Of Revenue Expenditures, And Changes In Fund Balance Year Ended Dec. 31 capital projects fund bonds debt service fund 4 Revenue SO SO 5 Expenditures : 6 Capital outlay $3,250.000 7 Debt service 8 Interest $306,000 9 Principal $150.000 10 Total expenditures $3,250,000 $456,000 11 Excess (Deficiency) of revenues over expenditures ($3,250,000) ($456,000) 12 Other financing sources (Uses): 13 Proceed of bonds 56,120,000 14 Transfers in (out) ($120,000) $576.000 15 Total other financing sources $6.000.000 $576,000 16 Net change in fund balance $2.750.000 $120.000 17 Fund balance-Jan. 1 SO SO 18 Fund balance-Dec. 31 $2,750,000 $120,000