Advanced Financial Accounting
Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Chapter 18, Problem 18.6E

Capital Projects Fund Entries and Statements
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 $200,000. On January 1, 20X2, a 10 percent, $150,000 bond issue was sold at 104.0 with the premium transferred to the debt service fund. At that date, the county board provided a $50,000 grant. After a period of negotiation, the city council awarded a construction contract for $182,000 on April 5, 20X2. The ramp was completed on August 8, 20X2; its actual cost was $189,000. The city council approved payment of the total actual cost of $189,000.

In addition to the $189,000, the ramp was carpeted with all-weather material at a cost of $5,500. 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.

Required

  1. Prepare entries for the capital projects fund for 20X2.
  2. Prepare a statement of revenues, expenditures, and changes in fund balance for the capital projects fund for 20X2.

(a)

Expert Solution
Check Mark
To determine

Introduction: Interim reporting is made in between the fiscal year. It is made before the completion of fiscal year in mostly public corporation for taking various decisions for the remaining period. Mostly quarterly and half yearly report is prepared.

The journal entries for capital project fund for 20X2.

Explanation of Solution

The journal entries for capital project fund for 20X2 is as follows:

    DateParticularsDebit ($)Credit ($)
    January 1, 20X2Cash50000 
     To revenue account-Grant 50000
     (Recording entry for receipt of grant from country board)  
        
    January 1, 20X2Cash156000 
     To Other financing sources-Bond account 150000
     To Other financing sources-Bond premium 6000
     (Recording entry for issuing bonds at premium)  
        
    January 1, 20X2Other financing sources-Transfer to debt service fund6000 
     To cash 6000
     (Recording entry for transfer of bond premium to debt service fund)  
        
    April 5, 20X2Encumbrances-construction contract182000 
     To Budgetary fund balance-Assigned for encumbrances 182000
     (Recording entry for construction contract awarded)  
        
    August 8, 20X2Budgetary fund balance-Assigned for encumbrances182000 
     To Encumbrances-construction contract 182000
     (Recording entry to reverse the effect of construction contract as ramp was completed)  
        
    August 8, 20X2Expenditure-Capital expense189000 
     To Contract payable 189000
     (Recording entry for approval of payment of all construction expense)  
        
    August 8, 20X2Expenditures 5500 
     To vouchers payable 5500
     (Recording entry for expense incurred for carpeting all-weather material to building)  
        
    November 3, 20X2Contract payable189000 
     Vouchers payable5500 
     To Cash 194500
     (Recording entry for payment of expenses related to construction of ramp)  
        
    November 3, 20X2Revenue account-Grant50000 
     Other financing sources-Bond account150000 
     Other financing sources-Bond premium6000 
     To fund balance-unassigned 206000
     (Recording entry for closing nominal accounts)  
        
    November 3, 20X2Fund balance-unassigned200500 
     To Expenditures 194500
     To Other financing sources-Transfer to debt service fund 6000
     (Recording entry for closing nominal accounts)  
        
    November 3, 20X2Other financing sources-Transfer to debt service fund5500 
     To cash 5500
     (Recording entry for transfer of remaining amount to debt service fund)  
        
    November 3, 20X2Fund balance-unassigned  
     To Other financing sources-Transfer to debt service fund  
     (Recording entry to close balance of debt service fund)  

(b)

Expert Solution
Check Mark
To determine

Introduction: Interim reporting is made in between the fiscal year. It is made before the completion of fiscal year in mostly public corporation for taking various decisions for the remaining period. Mostly quarterly and half yearly report is prepared.

The statement of revenues, expenditures and changes in fund balance for capital projects fund.

Explanation of Solution

The statement of revenues, expenditures and changes in fund balance for capital projects fund is as follows:

    ParticularsAmount ($)
    Revenue- Country grant50000
    Expenditure-Capital expense (189000+5500)-194500
    Expense over revenue (A)-144500
    Other finance sources

     
    Bonds issued156000
    Less: Premium-6000
    Less: Remaining balance transferred-5500
    Total of Other finance sources (B)144500
    Net change in balance (A-B)0

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Chapter 18 Solutions

Advanced Financial Accounting

Ch. 18 - Prob. 18.11QCh. 18 - Prob. 18.12QCh. 18 - Prob. 18.13QCh. 18 - GASB 34 required a budgetary comparison schedule...Ch. 18 - Prob. 18.15QCh. 18 - Prob. 18.1CCh. 18 - Capital Projects, Debt Service, and Internal...Ch. 18 - Prob. 18.1.1ECh. 18 - Prob. 18.1.2ECh. 18 - Prob. 18.1.3ECh. 18 - Prob. 18.1.4ECh. 18 - Prob. 18.1.5ECh. 18 - Prob. 18.1.6ECh. 18 - Prob. 18.1.7ECh. 18 - Prob. 18.1.8ECh. 18 - Prob. 18.1.9ECh. 18 - Prob. 18.1.10ECh. 18 - Prob. 18.1.11ECh. 18 - Prob. 18.1.12ECh. 18 - Multiple-Choice Items on Governmental Funds [AICPA...Ch. 18 - Prob. 18.2.2ECh. 18 - Prob. 18.2.3ECh. 18 - Multiple-Choice Items on Governmental Funds [AICPA...Ch. 18 - Prob. 18.2.5ECh. 18 - Multiple-Choice Items on Governmental Funds [AICPA...Ch. 18 - Multiple-Choice Items on Proprietary Funds [AICPA...Ch. 18 - Prob. 18.3.2ECh. 18 - Prob. 18.3.3ECh. 18 - Prob. 18.3.4ECh. 18 - Prob. 18.3.5ECh. 18 - Prob. 18.3.6ECh. 18 - Prob. 18.3.7ECh. 18 - Prob. 18.3.8ECh. 18 - Prob. 18.3.9ECh. 18 - Prob. 18.4.1ECh. 18 - Prob. 18.4.2ECh. 18 - Prob. 18.4.3ECh. 18 - Prob. 18.4.4ECh. 18 - Prob. 18.4.5ECh. 18 - Prob. 18.4.6ECh. 18 - Prob. 18.4.7ECh. 18 - Prob. 18.4.8ECh. 18 - Prob. 18.5.1ECh. 18 - Prob. 18.5.2ECh. 18 - Prob. 18.5.3ECh. 18 - Prob. 18.5.4ECh. 18 - Prob. 18.5.5ECh. 18 - Prob. 18.5.6ECh. 18 - Prob. 18.5.7ECh. 18 - Prob. 18.5.8ECh. 18 - Capital Projects Fund Entries and Statements The...Ch. 18 - Debt Service Fund Entries and Statements The City...Ch. 18 - Enterprise Fund Entries and Statements Augusta has...Ch. 18 - Interfund Transfers and Transactions During 20X8,...Ch. 18 - Internal Service Fund Entries and Statements...Ch. 18 - Prob. 18.11.1ECh. 18 - Prob. 18.11.2ECh. 18 - Prob. 18.11.3ECh. 18 - Prob. 18.11.4ECh. 18 - Prob. 18.11.5ECh. 18 - Prob. 18.11.6ECh. 18 - Prob. 18.11.7ECh. 18 - Prob. 18.11.8ECh. 18 - Prob. 18.11.9ECh. 18 - Prob. 18.11.10ECh. 18 - Adjusting Entries for General Fund [AICPA Adapted]...Ch. 18 - Entries for Funds [AICPA Adapted] Olivia Village...Ch. 18 - Prob. 18.14PCh. 18 - Prob. 18.15PCh. 18 - Prob. 18.16PCh. 18 - Matching Items Involving Various Funds The...Ch. 18 - Prob. 18.18.1PCh. 18 - Prob. 18.18.2PCh. 18 - Prob. 18.18.3PCh. 18 - Prob. 18.18.4PCh. 18 - Prob. 18.18.5PCh. 18 - Prob. 18.18.6PCh. 18 - Prob. 18.18.7PCh. 18 - Prob. 18.18.8PCh. 18 - Prob. 18.18.9PCh. 18 - Prob. 18.18.10PCh. 18 - Matching Items Involving the Statement of Cash...Ch. 18 - Prob. 18.20PCh. 18 - Matching Items on Fund Transactions [AICPA...Ch. 18 - Major Fund Tests The City of Somerset has the...Ch. 18 - Prob. 18.23PCh. 18 - Prob. 18.24.1PCh. 18 - Prob. 18.24.2PCh. 18 - Prob. 18.24.3PCh. 18 - Prob. 18.24.4PCh. 18 - Prob. 18.24.5PCh. 18 - Prob. 18.24.6PCh. 18 - Prob. 18.24.7PCh. 18 - Prob. 18.24.8PCh. 18 - Prob. 18.24.9PCh. 18 - Prob. 18.24.10PCh. 18 - Prob. 18.24.11PCh. 18 - Prob. 18.24.12PCh. 18 - Prob. 18.24.13PCh. 18 - Prob. 18.24.14PCh. 18 - Prob. 18.24.15PCh. 18 - Prob. 18.25PCh. 18 - Prob. 18.26P
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