a.

b.

c.

d.

e.

The state government established a capital project fund in 2019 to build new highways. The fund is supported by a 5 percent tax on diesel fuel sales in the state. The tax is collected by private gas stations and remitted in the following month to the State. The following transactions occurred during 2020: Capital Project Fund Trial Balance: December 31, 2019 Debits Credits Cash $8,550,000 2,700,000 Taxes Receivable Contracts Payable $1,950,000 Fund Balance 9,300,000 1. $2,100,000 of encumbrances outstanding at December 31, 2019, were re-established. 2. During the year, fuel taxes were remitted to the State totaling $23,600,000, including the amount due at the end of the previous year. In addition, $2,870,000 is expected to be remitted in January of next year for fuel sales in December 2020. 3. The State awarded new contracts for road construction totaling $23,650,000. 4. During the year, contractors submitted invoices for payment totaling $23,970,000. These were all under the terms of contracts (i.e., same $ amounts) issued by the State. 5. The State made payments on outstanding accounts of $23,375,000. The state government operates a debt service fund to service outstanding general obligation bonds. The following transactions occurred during 2020: Debt Service Fund Trial Balance: December 31, 2019 Debits Credits Cash $210,000 Fund Balance $210,000 6. The state General Fund provided cash of $4,850,000 through transfer to the debt service fund. 7. Payments for matured interest totaled $2,985,000 and payments for matured principal totaled $1,850,000 during the year. 8. In December, the State refunded bonds to obtain a better interest rate. New bonds were issued providing proceeds of $25,000,000, which was immediately used to retire outstanding bonds in the same amount. Required: Page 144 Use the Excel template provided. A separate tab is provided in Excel for each of the requirements: a. Prepare journal entries recording the events 1 to 8 (above) for the capital projects and debt service funds. b. Post the journal entries to T-accounts. c. Prepare closing entries. d. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the Governmental Funds (the General Fund and special revenue fund financial statements have already been prepared). e. Prepare a Balance Sheet for the Governmental Funds assuming all unexpended spendable net resources in the capital projects fund are classified as restricted and in the debt service fund are classified as assigned. State Government Capital Project Fund Journal Entries December 31, 2020 Account Title Debits Credits 1 State Government Debt Service Fund Journal Entries December 31, 2020 Account Title Debits Credits 6 CAPITAL PROJECTS FUND GENERAL LEDGER CASH 8,550,000 TAXES RECEIVABLE 2,700,000 CONTRACTS PAYABLE 1,950,000 bb FUND BALANCE 9,300,000 bb bb bb 2,700,000 1,950,000 9,300,000 8,550,000 BUDGETARY FUND BALANCE - RESERVE FOR ENCUMBRANCES FUEL TAX REVENUES CAPITAL EXPENDITURES ENCUMBRANCES 4 Total debit balances Total credit balances 11,250,000 11,250,000 DEBT SERVICE FUND GENERAL LEDGER EXPENDITURES BOND PRINCIPAL EXPENDITURES BOND INTEREST CASH 210,000 FUND BALANCE 210,000 bb bb 210,000 210,000 OTHER FINANCING SOURCES REFUNDING OF EXISTING DEBT OTHER FINANCING USES REFUNDING OF EXISTING DEBT OTHER FINANCING SOURCES TRANSFERS IN Total debit balances Total credit balances 210,000 210,000 STATE GOVERNMENT Capital project Fund Closing Entries December 31, 2020 Account Title Debits Credits CAPITAL PROJECTS FUND FUND BALANCE 9,300,000 bb closing entry 9,300,000 Non- spendable Restricted Committ ed Assigned Unassigned Total Fund Balance STATE GOVERNMENT Debt service fund closing entries December 31, 2020 Account Title Debits Credits DEBT SERVICE FUND FUND BALANCE 210,000 bb closing entry 210,000 Non- spendable Restricted Committ ed Assigned Unassigned Total Fund Balance General Fund Special Revenue Fund Capital Projects Fund Total Debt Service Governmental Fund Funds $ S $ 63,500,000 $ 5,680,000 $ 63,500,000 5,680,000 Revenues Income taxes Intergovernmental revenues Fuel taxes License Fees Fines Total Revenues areas shaded in blue are not a arequirement of this exercise but are assumed to provide a complete financial statement 1,162,000 255,000 1,417,000 1,162,000 255,000 70,597,000 69,180,000 27.890.000 27,200,000 8,770,000 Expenditures Current: General Government Operations Public Safety Tourism Wildlife Management Capital Outlay Debt Service Principal Interest Total Expenditures 27,890,000 27,200,000 8,770,000 1,293,300 305,000 1.293,300 305,000 63,860,000 1,598,300 65,458,300 Excess (Deficiency) of Revenues Over Expenditures 5,320,000 (181,300) 5,138,700 Other financing sources (uses) Bond Refunding - proceeds Bond Refunding - payment Transfers in Transfers out total other financing sources (uses) 300,000 (5.100,000) (5.100,000) 300,000 (5,100,000) (4,800,000) 300,000 Net Change in Fund Balance Fund Balance, January 1 Fund Balance, December 31 220,000 118,700 2,350,000 252,000 S 2.570,000 $370.700 S 338,700 2,602,000 S2.940,700 S Special Capital General Fund Revenue Fund Projects Fund Total Debt Service Governmental Fund Funds $ 307,000 $ areas shaded in blue are not a a requirement of this exercise but are assumed to provide a complete financial statement Assets Cash Investment in US securities Taxes receivable Licenses receivable Due from other governments Accrued interest receivable Supplies Inventory Total Assets 137,000 2,069,000 $ 2,560,000 1,077,000 58,000 700,000 220,000 36,000 6,720,000 $ 2,376,000 2,560,000 1,077,000 195,000 700.000 220,000 42.700 7,170,700 6,700 450,700 $ $ $ $ Liabilities and Fund Balances Liabilities Accounts Payable Wages Payable Contracts payable 38,000 3,750,000 400,000 3,788,000 442,000 42,000 Total Liabilities 4,150,000 80,000 4,230,000 36,000 6,700 42,700 364,000 364,000 Fund Balances Nonspendable - supplies inventory Restricted for: New highways Fish and game Assigned to: Debt service Public works Unassigned Total Fund Balances 34,000 2,500,000 2,570,000 34,000 2,500,000 2.940,700 370,700 Total Liabilities and Fund Balances 6,720,000 $ 450,700 $ - $ - $ 7,170,700