Question

This year Riverside began work on an outdoor amphitheater and concession stand at the city’s park. It is to be financed by a $5,300,000 bond issue and supplemented by a $680,000 General Fund transfer. The following transactions occurred during the current year:

1. The General Fund transferred $680,000 to the Park Building Capital Projects Fund.
2. A contract was signed with Restin Construction Company for the major part of the project on a bid of $4,500,000.
3. Preliminary planning and engineering costs of $87,000 were vouchered for the Great Pacific Engineering Company. (This cost had not been encumbered.)
4. A payable was recorded for an $27,500 billing from the Water and Sewer enterprise fund for the cost of extending water pipes to the new concession stand.
5. An invoice in the amount of $1,900,000 was received from Restin for progress to date on the project.
6. The $5,300,000 bonds were issued at par.
7. The amount billed by the contractor (see Transaction 5) less 5 percent retained was paid.
8. Temporary investments were purchased at a cost of $1,980,000.
9. Closing entries were prepared as of year-end. Assume that $3,400,000 of the encumbrances outstanding will be paid from the bond proceeds and are therefore considered restricted resources. The remaining fund balance is assigned.

Prepare a balance sheet for the Park Building Capital Projects Fund as of year-end.

Prepare a statement of revenues, expenditures, and changes in fund balances for the period.

Answer 1

RIVERSIDE Park Building Capital Projects Fund Balance Sheet, December 31
Assets
Cash		2195000
Investments		1980000
Total assets		4175000
Liabilities and fund balances
Liabilities:
Contracts Payable—Retained Percentage		95000
Due to Other Funds		27500
Vouchers Payable		87000
Total Liabilities		209500
Fund Balances:
Fund Balance—Restricted	3400000
Fund Balance—Assigned	565500
Total Fund Balances		3965500
Total Liabilities and Fund Balances		4175000

Cash = 680000+5300000-(1900000*0.95)-1980000 = 7785000

19000000*0.05 = 95000

5300000-3400000-(27500+87000+1900000)

RIVERSIDE Park Building Capital Projects Fund Statement Of Revenues, Expenditures, and Changes in Fund Balances For the Period Ended December 31
Expenditures:
Construction Expenditures		2014500
Other Financing Sources and Uses:
Interfund Transfers In	680000
Proceeds of Bonds Sold	5300000
		5980000
Excess of Revenues and Other Sources Over Expenditures		3965500
Fund Balances, January 1		0
Fund Balances, December 31		3965500