This year Southfork began work on a senior center to hold activities for its growing senior citizen population. It is to be financed by a $5,000,000 bond issue, a $500,000 grant, and a $500,000 General Fund transfer. The following transactions occurred during the current year: The General Fund transferred $500,000 to the Senior Center Capital Projects Fund. A plot of land was purchased for $400,000 in cash. (This cost had not been encumbered.) Preliminary planning and engineering costs of $95,000 were vouchered. (This cost had not been encumbered.) A contract was signed with Sunset Construction Company for the major part of the project on a bid of $4,950,000. The $5,000,000 bonds were issued at par. Temporary investments were purchased at a cost of $3,500,000. A payable was recorded for a $49,500 billing from the Water and Sewer enterprise fund for the cost of extending water pipes to the new building. (This cost had not been encumbered.) An invoice in the amount of $1,500,000 was received from Sunset Construction Company for progress to date on the project. The amount billed by the contractor less 5 percent retainage was paid. Half of the planning and engineering costs and $25,000 of the water and sewer billing were paid. Grant revenue of $100,000 was received in cash for construction expenditures that were considered allowable costs in accordance with the grant agreement. Closing entries were prepared as of year-end. Assume that $2,500,000 of the encumbrances outstanding will be paid from the bond proceeds and are therefore considered restricted resources. The remaining fund balance is assigned. Required Prepare journal entries to record the preceding information in the general ledger accounts for the Senior Center Capital Projects Fund.

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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This year Southfork began work on a senior center to hold activities for its growing senior citizen population. It is to be financed by a $5,000,000 bond issue, a $500,000 grant, and a $500,000 General Fund transfer. The following transactions occurred during the current year:

The General Fund transferred $500,000 to the Senior Center Capital Projects Fund.
A plot of land was purchased for $400,000 in cash. (This cost had not been encumbered.)
Preliminary planning and engineering costs of $95,000 were vouchered. (This cost had not been encumbered.)
A contract was signed with Sunset Construction Company for the major part of the project on a bid of $4,950,000.
The $5,000,000 bonds were issued at par.
Temporary investments were purchased at a cost of $3,500,000.
A payable was recorded for a $49,500 billing from the Water and Sewer enterprise fund for the cost of extending water pipes to the new building. (This cost had not been encumbered.)
An invoice in the amount of $1,500,000 was received from Sunset Construction Company for progress to date on the project.
The amount billed by the contractor less 5 percent retainage was paid.
Half of the planning and engineering costs and $25,000 of the water and sewer billing were paid.
Grant revenue of $100,000 was received in cash for construction expenditures that were considered allowable costs in accordance with the grant agreement.
Closing entries were prepared as of year-end. Assume that $2,500,000 of the encumbrances outstanding will be paid from the bond proceeds and are therefore considered restricted resources. The remaining fund balance is assigned.

Required

Prepare journal entries to record the preceding information in the general ledger accounts for the Senior Center Capital Projects Fund.
Prepare a statement of revenues, expenditures, and changes in fund balances for the period.
Prepare a balance sheet for the Senior Center Capital Projects Fund as of year-end.

Required A Required B Required C
Prepare a balance sheet for the Senior Center Capital Projects Fund as of year-end.
SOUTHFORK
Senior Center Capital Projects Fund
Balance Sheet As of Year End
Total Assets
Liabilities:
Total Liabilities
Fund Balances:
Assets
Liabilities and Fund Balances
Total Fund Balances
Total Liabilities and Fund Balances
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$
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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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