Question

The City of Waterman established a capital projects fund for the construction of an access ramp from the parking garage to the city's office building to be used by individuals with disabilities. The estimated cost of the ramp is $221,000. On January 1, 20X2, a 10 percent, $160,000 bond issue was sold at 104 with the premium transferred to the debt service fund. At that date, the county board provided a $61,000 grant. After a period of negotiation, the city council awarded a construction contract for $174,000 on April 5, 20X2. The ramp was completed of the total actual cost of $180,000. In addition to the $180,000, the ramp was carpeted with all-weather material at a cost of $20,500. On November 3, 20X2, the city council gave the final approval to pay for the ramp and the carpeting. After all bills were paid, the remaining fund balance was transferred to the debt service fund August 8, 20X2; its actual cost was $180,000. The city council approved payment on Required: Prepare entries for the capital projects fund for 20X2. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) a. View transaction list Journal entry worksheet 7 1 2 5 8 12 Record the receipt of the grant from the county Note: Enter debits before credits Date General Journal Debit Credit Jan 01 Record entry Clear entry View general journal b. Prepare a statement of revenues, expenditures, and changes in fund balance for the capital projects fund for 20X2. (Negative amounts and amounts to be deducted should be indicated by minus sign.) CITY OF WATERMAN Capital Projects Fund Statement of Revenues, Expenditures, and Changes in Fund Balance For Fiscal Year Ended December 31, 20X2 Revenue: Expenditures: 0 Other Financing Sources (Uses): Total Other Financing Sources (Uses) 0 0 Fund Balance, January 1, 20X2 Fund Balance, December 31, 20X2 0 A

Answer 1

City of Waterman Journal Enteries Debit in $ Credit in $ Particulars Date 1,1.20x2 Cash a/c Dr 61000 To Revenue County Grant 61000 (Receipt of grant from county.) Cash a/c 1.1.20x2 Dr 166400 To Other Financing Sources-Bond Issue 160000 To Other Financing Sources-Bond Premium 6400 (Sale of $150,000 par bonds at 104.) 3.11.20x2 Other Financing Uses-Transfer Dr. Out to Debt Service Fund a/c 6400 То Cash 6400 (Transfer premium to debt service fund.) 2. Entries to record and pay for construction: 5.4.20x2 Encumbrances a/c 174000 Dr. To Budgetary balances assigned for encumbrances 174000 Budgetary Fund Balance assigned for encumbrances a/c Dr. To Encumbrances 174000 8.8.20x2 174000 Expenditures-Capital Outlay a/c To Contract Payable (Establish contract payable for walkway.) Dr. 180000 180000 Expenditures-Capital Outlay a/c o Vouchers Payable 20500 Dr 20500 (Establish vouchers payable for added carpeting.) 3.11.20x2 Contract Payable a/c Vouchers Payable a/c То Cash Dr. 180000 Dr 20500 200500 (Pay contract payable and vouchers payable) 3. Close nominal accounts: Revenue County Grant a/c Dr 61000 Other Financing Sources-Bond Issue a/c Dr. 160000 Other Financing Sources-Bond Premium a/c To Fund Balance-Unassigned 6400 Dr 227400 Fund Balance-Unassigned a/c Dr 206900 To Expenditures 200500 To Other Financing Uses- TransferOut to Debt Service Fund 6400 ending balance and close transfer account: 4. Transfer Other Financing Uses-Transfer Out to Debt Service Fund a/c Dr. 20500 То Cash 20500 (Record transfer of remainder to Debt Service) Fund Balance-Unassigned a/c Dr 20500 To Other Financing Uses -TransferOut to Debt Service Fund 20500 (Close transfer out against unassigned fund balance.)

Statement of Revenues, Expenditures,and Changes in Fund Balance For Fiscal Year Ended December 31, 20X2 Revenue: County Grant Expenditures: 61000 200500 Capital Outlay -139500 Deficiency due to excess of Expenditures over Revenue Other Financing Sources (Uses): Proceeds of Bond Issue 166400 Transfer Out to Debt Service Fund-Premium -6400 Transfer Out to Debt Service Fund--Remainder -20500 Total Other Financing Sources (Uses) Net Change in Fund Balance Fund Balance, January 1, 20X2 13 0 0 C Fund Balance, December 31, 20X2 0