During FY 2023, the voters of Surprise County approved construction of a $23 million police facility and an $13 million fire station to accommodate the countys population growth. The construction will be financed by tax-supported bonds in the amount of $34 million, a $1 million economic stimulus grant, and a portion of future use tax revenues. During 2023, the following events and transactions occurred. Required
- Prepare journal entries to record the the following transactions in a single Surprise County Construction Fund, in a capital projects fund, and in the 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.)
- Prepare a Surprise County Construction Fund balance sheet for the year ended December 31, 2023. (Enter your answers in whole dollar amounts and not in millions.)
- Prepare a Construction Fund statement of revenues, expenditures, and changes in fund balances for the year ended December 31, 2023. (Negative amounts should be indicated by a minus sign. Enter your answers in whole dollar amounts and not in millions.)
Fund / Transaction Governmental General Journal Debit Credit Activties 1. Issued $140,000 of 8 percent bond anticipation notes to cover preliminary planning and engineering expenses. Assume this note will be repaid when the bond is issued and thus can be considered long-term. 1 Construction Fund Cash 140.000 Other Financing SourcesProceeds of Bonds Anticipation Notes 140,000 Governmental Activities Cash 140.000 Bond Anticipation Notes Payable 140,000 2. Incurred and vouchered architecture and engineering costs in the amount of $64,000. They were split evenly between the two projects. These items were not encumbered.) 2 Construction Fund Construction Expenditures-Police 32,000 Construction Expenditures-Fire 32,000 Vouchers Payable 64.000 OOO OOO Governmental Activities 32,000 Construction Work in Progress-Police Construction Work in Progress-Fire Vouchers Payable 32,000 64,000 3. Entered into a construction contract for $36 million-$23 million was for the police facility and $13 million was related to the fire station. 3 Construction Fund 23.000.000 13.000.000 Encumbrances-Police Encumbrances-Fire Encumbrances Outstanding-Police Encumbrances Outstanding-Fire 23,000,000 13,000,000 >> Governmental Activities No Journal Entry Required 4. Issued the $34 million, 20-year 5 percent bonds at 101. (The premium would be recorded in a debt service fund. You do not need to record this entry) 4 Construction Fund 34.000.000 Cash Other Financing SourcesProceeds of Bonds 34,000,000 Governmental Activities Cash 34,340.000 Bonds Payable Premium on Bonds Payable OO 34,000,000 340.000 5. Paid off the bond anticipation notes that had been outstanding 180 days. (Interest is an expenditure of the capital projects fund.) 5 Construction Fund Other Financing Uses-Retirement of Bond Anticipation Notes 140.000 Interest Expenditures 5,600 Cash 145,600 Governmental Activities Bond Anticipation Notes Payable 140,000 5,600 Expenses-Interest on BANS Cash 145.600 6. An invoice for $18 million was received from the contractor for a portion of police facility construction ($12 million) and fire station construction (56 million). ba Construction Fund Record the reversal of encumbrances. Encumbrances Outstanding-Police 12.000.000 Encumbrances Outstanding-Fire 6.000.000 Encumbrances-Police 12,000,000 Encumbrances-Fire 6.000.000 6b Record the construction Work-in-progress of the police facility and the fire station in the capital project fund. Construction Expenditures-Police 12.000.000 Construction Expenditures-Fire 6.000.000 Contracts Payable 18,000,000 6c Governmental Activities Record the construction Work-in-progress of the police facility and the fire station. Construction Work in Progress-Police Construction Work in Progress-Fire Contracts Payable 12.000.000 6.000.000 > 18,000,000 7. Half of the grant funds were received in cash. 7 Construction Fund Cash 500,000 >> Revenues 500,000 Governmental Activities 500.000 Cash Program Revenues-Economic Development-Capital Grants & Contributions 500,000 18.000.000 8. The initial construction invoice, less 5 percent retainage, was paid. 8 Construction Fund Contracts Payable Contracts Payable-Retained Percentage Cash 900,000 17,100,000 2. The fire station was completed, and a final invoice for the remaining $7 million was received. All fire station construction charges incurred can be capitalized as buildings. 9a Construction Fund Record the reversal of encumbrances. Encumbrances Outstanding-Fire 7.000.000 Encumbrances-Fire 7,000,000 9b Record the completion of the fire station construction contract. Construction ExpendituresFire Contracts Payable 7,000,000 7.000.000 9c Governmental Activities Record the appropriation of funds towards completion the fire station. 7.000.000 Construction Work in Progress-Fire Contracts Payable 7,000,000 9d Record the completion of the fire station construction contract. Buildings Construction Work in Progress-Fire 11.000.000 X 11,000,000 10. Following inspection, the fire station invoices were paid in full. 10 Construction Fund Contracts Payable Contracts Payable-Retained Percentage Cash 7.000.000 300,000 >> 7,300,000 11. At year-end, the contractor billed the county an additional $7.5 million for the police facility; however, the police facility was incomplete. 11a Construction Fund Record the reversal of encumbrances. Encumbrances Outstanding-Police 7.500.000 Encumbrances-Police 7,500,000 11b Record the police facility construction work-in-progress. Construction Expenditures-Police Contracts Payable 7.500.000 7,500,000 11c Governmental Activities Record the police facility construction work-in-progress. 7.500.000 Construction Work in Progress-Police Contracts Payable O 7,500,000 12. Temporary accounts were closed at year-end. Assume that the fund balances are all restricted. 12 Construction Fund Other Financing SourcesProceeds of Bonds Anticipation Notes Other Financing SourcesProceeds of Bonds 140.000 OOON O 34.000.000 500,000 Revenues Construction Expenditures-Police Construction Expenditures-Fire Interest Expenditures Other Financing Uses-Retirement of Bond Anticipation Notes Fund Balance-Restricted 5.800 140,000 Governmental Activities No Journal Entry Required SURPRISE COUNTY Construction Fund Balance Sheet December 31, 2023 Assets Cash Total Assets Liabilities and Fund Balances Liabilities: $ s 64,000 Vouchers Payable Contracts Payable Contracts Payable-Retained Percentage Total Liabilities Fund Balances: 64,000 Fund Balance-Restricted Total Liabilities and Fund Balances $ 64,000 SURPRISE COUNTY 0 Construction Fund Statement of Revenues, Expenditures, and Changes in Fund Balances For the Period Ended December 31, 2023 Revenues Expenditures: Construction Expenditures-Police Construction Expenditures-Fire Interest Expenditures Total Expenditures Excess of Expenditures Over Revenues Other Financing Sources (Uses): Proceeds of Bond Anticipation Notes Proceeds of Bonds Retirement of Bond Anticipation Notes Total Other Financing Sources (Uses) Excess of Revenues and Other Financing Sources and Uses Over Expenditures Fund Balances, January 1, 2023 Fund Balances, December 31, 2023 S 0 0 0 0
