Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

11. On June 1, 2015, the City of Cape May authorized the construction of a police station at an expected cost of $250,000. Financing will

11. On June 1, 2015, the City of Cape May authorized the construction of a police station at an expected cost of $250,000. Financing will be provided through transfers from a Special Revenue Fund.

The following transactions occurred during the fiscal year beginning June 1, 2015, relating to the Capital Project Fund.

1. The $250,000 receivable from the Special Revenue Fund was recorded.

2. The Special Revenue Fund transferred $125,000 to the Capital Project Fund to begin construction on the police station.

3. The Capital Project Fund invested the transfer of monies in a six-month certificate, at 5%.

4. A contract in the amount of $250,000 was let to the lowest bidder.

5. Architect and legal fees in the amount of $3,125 were approved for payment. There was no encumbrance for these expenditures.

6. Contract billings in the amount of $250,000 were approved for payment on the completion of the police station and the encumbrance was removed.

7. The six-month certificate was redeemed at maturity with interest revenue.

8. The Special Revenue Fund transferred the final amount of $125,000 to the Capital Projects Fund.

9. All liabilities except for the retention of 5% of the contract price were paid.

10. All requirements and obligations were completed; the final payment of the contract price was made and all nominal accounts were closed.

Required:

Prepare the journal entries necessary in the Capital Projects Fund to record the transactions and events described above.

14. On January 1, 2015, Metropolis City issued a 7%, 5-year, $100,000 general obligation bond for $96,007. The bond pays interest annually (on December 31) and was issued to yield 8%. The bond was issued in the capital projects fund, and the proceeds are to be used to build a giant ball that will drop twenty stories on New Years Eve. No construction has occurred. A debt service fund was created to meet the interest and principal payments. The city prepares financial statements on December 31 of each year.

Required:

Determine how the above information will be reflected on each of the following statements for the year 2015.

1. The governmental funds statement of revenue, expenditures, and changes in fund balances. List the governmental fund and then list the dollar amount within the appropriate heading on the statement (such as Revenues, Expenditures, or Other Financing Sources (Uses)).

2. The government-wide statement of net position.

3. The government-wide statement of activities.

16. The following information is available about items that differ between the governmental funds and the government-wide statements. Assume that there are no internal service funds. The schedule of capital assets prepared for the year ended December 31, 2015, includes the following items:

Beginning Ending

Government Activities Balance Additions Retirements Balance

Total Capital Assets

(at gross) $700,000 $50,000 $(25,000) $725,000

Less: Accumulated

Depreciation (170,000) (30,000) 17,500 (182,500)

Net Capital Assets $530,000 $20,000 $ (7,500) $542,500

The bond was issued at the beginning of the year, and the following amortization schedule is available.

Interest Cash Premium Bond

Date Expense Paid Amortization Balance

1/1/2015 $104,213

12/31/2015 6,253 7,000 747 $103,466

The net change in fund balancestotal governmental funds was $1,100,000.

Required:

Prepare the reconciliation of the statement of revenues, expenditures, and changes in fund balances to the statement of activities on a government-wide basis for the year ended December 31, 2015.

17. The following information was available about items that differed between the governmental funds and the government-wide statements. Assume that there are no internal service funds. The schedule of capital assets prepared for the year ended December 31, 2015, included the following items:

Beginning Ending

Government Activities Balance Additions Retirements Balance

Total Capital Assets

(at gross) $800,000 $60,000 $(30,000) $830,000

Less: Accumulated

Depreciation (200,000) (40,000) 22,500 (217,500)

Net Capital Assets $600,000 $20,000 $(7,500) $612,500

The bond was issued at the beginning of the year and the following amortization schedule is available:

Interest Cash Premium

Date Expense Paid Amortization Balance

1/1/2015 $104,213

12/31/2015 $6,253 $7,000 $747 $103,466

The total fund balances for governmental activities was $3,125,000 at the end of the year.

Required:

Prepare the reconciliation of the governmental fund balances to the net position reported for governmental activities on the Statement of Net Position as of December 31, 2015

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental Accounting Principles

Authors: John Wild, Ken Shaw, Barbara Chiappetta

19th Edition

0077303202, 9780077303204

More Books

Students also viewed these Accounting questions