Question
During FY 2017, the voters of Surprise County approved construction of a $21 million police facility and an $11 million fire station to accommodate the
During FY 2017, the voters of Surprise County approved construction of a $21 million police facility and an $11 million fire station to accommodate the countys population growth. The construction will be financed by tax-supported bonds in the amount of $30 million, a $1 million economic stimulus grant, and a portion of future use tax revenues. During 2017, the following events and transactions occurred.
| Required |
| 4a. Prepare journal entries to record the the following transactions in a single Surprise County Construction Fund and governmental activities general journal at the government-wide level. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in whole dollar amounts and not in millions.) (i.) Issued $100,000 of 6 percent bond anticipation notes to cover preliminary planning and engineering expenses.
(ii.) Incurred architecture and engineering costs in the amount of $60,000. They were split evenly between the two projects.
(iii.) Entered into a construction contract for $32 million - $21 million was for the police facility and $11 million was related to the fire station.
(iv.) Issued the $30 million, 20-year 5% bonds at 101. (The premium should be recorded in a debt service fund. You do not need to record this entry.)
(v.) Paid off the bond anticipation notes that had been outstanding 180 days. (Interest is an expenditure of the capital projects fund.) Assume 360 days in a year.
(vi.) An invoice for $16 million was received from the contractor for a portion of police facility construction ($10 million) and fire station construction ($6 million). (a.) Record the appropriation of funds towards completed portion of the police facility and the fire station.
(b.) Record the construction work-in-progress of the police facility and the fire station in the capital project fund.
(c.) Record the construction Work-in-progress of the police facility and the fire station.
(vii.) Half of the grant funds were received in cash. The remainder is anticipated in 2018; however, the grantor notified the county that there is no guarantee that the federal government will appropriate the 2018 portion.
(viii.) The initial construction invoice, less 5% retainage, was paid.
(ix.) The fire station was completed, and a final invoice for the remaining $5 million was received. All fire station construction charges incurred can be capitalized as buildings.
(a.)Record the appropriation of funds towards completion of the fire station.
(b.)Record the completion of the fire station construction contract.
(c.) Record the appropriation of funds towards completion of the fire station.
(d.) Record the completion of the fire station construction contract.
(x.) Following inspection, the fire station invoices were paid in full.
(xi.) At year-end, the contractor billed the county an additional $7.5 million for the police facility; however, the police facility was incomplete.
(a.) Record the appropriation of funds towards the police facility.
(b.) Record the police facility construction work-in-progress.
(c.) Record the police facility construction work-in-progress.
|
(xii.) Temporary accounts were closed at year-end. Assume that the fund balances are all restricted.
| Fund | General Journal | Debit | Credit |
| Construction Fund | |||
| Fund | General Journal | Debit | Credit |
| Governmental Activities | |||
4b. Prepare a Surprise County Construction Fund balance sheet for the year ended December 31, 2017.
| Surprise County | |
| Construction Fund | |
| Balance Sheet | |
| December 31, 2017 | |
| Assets | |
| Cash | |
| Total Assets | |
| Liabilities and Fund Balances | |
| Liabilities: | |
| Vouchers Payable | |
| Contracts Payable | |
| Contracts Payable Retained Percentage | |
| Total Liabilites | 0 |
| Fund Balances: | |
| Fund Balance - Restricted | |
| Total Liabilities and Fund Balances | $ 0 |
4c. Prepare a Construction Fund statement of revenues, expenditures, and changes in fund balances for the year ended December 31, 2017. (Negative amounts should be indicated by a minus sign. Enter your answers in whole dollar amounts and not in millions.)
| Surprise County Construction Fund | |
| Statement of Revenues, Expenditures, and Changes in Fund Balances ending Dec. 31, 2017 | |
| Revenues | |
| Expenditures: | |
| Construction Expenditures Police | |
| Construction Expenditures Fire | |
| Interest Expenditures | |
| Total Expenditures | 0 |
| Excess of Expenditures Over Revenues | 0 |
| Other Financing Sources (Uses): | |
| Proceeds of Bond Anticipation Notes | |
| Proceeds of Bonds | |
| Repayment of Bond Anticipation Notes | |
| Total Other Financing Sources (Uses) | 0 |
| Excess of Revenues and Other Financing Sources and Uses Over Expenditures | 0 |
| Fund Balances, January 1, 2017 | |
| Fund Balances, December 31, 2017 | $0 |
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Government Auditing Standards 2011 Revision
Authors: U. S. Government Accountability Office, Comptroller General Of The United States
1st Edition
1482311372, 978-1482311372
