The citizens of Spencer County approved the issuance of $2,008,000 in 6 percent general obligation bonds to finance the construction of a courthouse annex. A capital projects fund was established for that purpose. The preclosing trial balance of the courthouse annex capital project fund follows: Trial Balance—December 31, 2020 Debits CreditsCash$908,000 Contract payable $551,000 Due from state government 192,000 Encumbrances 108,000 Expenditures—capital 1,854,000 Intergovernmental grant 395,000 OFS: premium on bonds 57,000 OFS: proceeds sale of bonds 2,008,000 Budgetary fund balance—Reserve for encumbrances 108,000 OFU: Transfer out 57,000 $3,119,000 $3,119,000 Required:a. Prepare any closing entries necessary at year-end.b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the courthouse annex capital project fund.c. Prepare a Balance Sheet for the courthouse annex capital project fund, assuming all unexpended resources are restricted to construction of the courthouse annex. ---### Year-End Procedures for Financial Statement Preparation and Balance Sheet#### Overview:This guide walks you through the process of preparing year-end financial statements and balance sheets for a capital projects fund. Here, we use an example from Spencer County, focusing on their Courthouse Annex Capital Projects Fund.#### Steps:---### 1. Preparing Year-End Closing Entries:**Instructions:**- Prepare any necessary closing entries at year-end to close out the books. This step is crucial because it zeroes out the balances of revenue and expenditure accounts, transferring them to the fund balance.**Journal Entry Worksheet:**To transfer revenue and expenditure to the fund balance, use the journal entry worksheet provided.**Journal Entry Template:**```plaintextRecord the closing entry to transfer revenue and expenditure to the fund balance.Note: Enter debits before credits.Event #1:| Event | General Journal | Debit | Credit ||---------------|-----------------|-------|--------|| a1. | | | |Tools: Record entry, Clear entry, View general journal```---### 2. Preparing a Statement of Revenues, Expenditures, and Changes in Fund Balance:**Instructions:**- Prepare this statement for the Courthouse Annex Capital Projects Fund.**Statement Template:**```plaintextSPENCER COUNTYCourthouse Annex Capital Projects FundStatement of Revenues, Expenditures, andChanges in Fund BalanceFor the Year Ended December 31, 2020| | ||------------------------------|----------|| Revenues | || Total Revenues | $0 || | || Expenditures | || Total Expenditures | $0 || | || Excess (Deficiency) of | || Revenues Over Expenditures | $0 || | || Other Financing Sources (Uses)| || | || Total Other Financing | $0 || Sources (Uses) | || | || Net Change in Fund Balance | || | || Fund Balance, January 1 | || | || Fund Balance, December 31 | $0 |```---### 3. Preparing the Balance Sheet:**Instructions:**- Prepare a Balance Sheet for the Cour

Government funds require two financial statements, balance sheet and statement of revenues,…

The citizens of Spencer County approved the issuance of $2,008,000 in 6 percent general obligation bonds to finance the construction of a courthouse annex. A capital projects fund was established for that purpose. The preclosing trial balance of the courthouse annex capital project fund follows: Trial Balance—December 31, 2020 Debits Credits Cash $ 908,000 Contract payable $ 551,000 Due from state government 192,000 Encumbrances 108,000 Expenditures—capital 1,854,000 Intergovernmental grant 395,000 OFS: premium on bonds 57,000 OFS: proceeds sale of bonds 2,008,000 Budgetary fund balance—Reserve for encumbrances 108,000 OFU: Transfer out 57,000 $ 3,119,000 $ 3,119,000 Required: a. Prepare any closing entries necessary at year-end. b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the courthouse annex capital project fund. c. Prepare a Balance Sheet for the courthouse annex capital project fund, assuming all unexpended resources are restricted to construction of the courthouse annex.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The citizens of Spencer County approved the issuance of $2,008,000 in 6 percent general obligation bonds to finance the construction of a courthouse annex. A capital projects fund was established for that purpose. The preclosing trial balance of the courthouse annex capital project fund follows:

Trial Balance—December 31, 2020		Debits	Credits
Cash	$	908,000
Contract payable				$	551,000
Due from state government		192,000
Encumbrances		108,000
Expenditures—capital		1,854,000
Intergovernmental grant					395,000
OFS: premium on bonds					57,000
OFS: proceeds sale of bonds					2,008,000
Budgetary fund balance—Reserve for encumbrances					108,000
OFU: Transfer out		57,000
	$	3,119,000		$	3,119,000

Required:
a. Prepare any closing entries necessary at year-end.
b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the courthouse annex capital project fund.
c. Prepare a Balance Sheet for the courthouse annex capital project fund, assuming all unexpended resources are restricted to construction of the courthouse annex.

---

### Year-End Procedures for Financial Statement Preparation and Balance Sheet

#### Overview:

This guide walks you through the process of preparing year-end financial statements and balance sheets for a capital projects fund. Here, we use an example from Spencer County, focusing on their Courthouse Annex Capital Projects Fund.

#### Steps:

---

### 1. Preparing Year-End Closing Entries:

**Instructions:**
- Prepare any necessary closing entries at year-end to close out the books. This step is crucial because it zeroes out the balances of revenue and expenditure accounts, transferring them to the fund balance.

**Journal Entry Worksheet:**
To transfer revenue and expenditure to the fund balance, use the journal entry worksheet provided.

**Journal Entry Template:**
```plaintext
Record the closing entry to transfer revenue and expenditure to the fund balance.

Note: Enter debits before credits.

Event #1:
| Event | General Journal | Debit | Credit |
|---------------|-----------------|-------|--------|
| a1. | | | |

Tools: Record entry, Clear entry, View general journal
```

---

### 2. Preparing a Statement of Revenues, Expenditures, and Changes in Fund Balance:

**Instructions:**
- Prepare this statement for the Courthouse Annex Capital Projects Fund.

**Statement Template:**
```plaintext
SPENCER COUNTY
Courthouse Annex Capital Projects Fund
Statement of Revenues, Expenditures, and
Changes in Fund Balance
For the Year Ended December 31, 2020

| | |
|------------------------------|----------|
| Revenues | |
| Total Revenues | $0 |
| | |
| Expenditures | |
| Total Expenditures | $0 |
| | |
| Excess (Deficiency) of | |
| Revenues Over Expenditures | $0 |
| | |
| Other Financing Sources (Uses)| |
| | |
| Total Other Financing | $0 |
| Sources (Uses) | |
| | |
| Net Change in Fund Balance | |
| | |
| Fund Balance, January 1 | |
| | |
| Fund Balance, December 31 | $0 |
```

---

### 3. Preparing the Balance Sheet:

**Instructions:**
- Prepare a Balance Sheet for the Cour

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