Exercise 1 (4 Marks)

Riyadh School District accepts donations that are used to provide awards to graduating seniors. Record the following transactions in the Riyadh Private Purpose Trust Fund - Awards Fund. Also, prepare a statement of changes in fiduciary net position for the Fund for the year ended December 31, 2018. This is the first year of operation for the Riyadh Private Purpose Trust Fund - Awards Fund.

a. Aphilanthropist donates marketable securities worth SAR 700,000 to the District, stipulating that all earnings on the securities be used for awards to graduates.

b. The District receives dividends on the securities in the amount of SAR 25,000.

c. The District makes various awards to graduating seniorsin the amount of SAR 30,000.

d. When the District prepares financial statements at the end of the year, the marketable securities have a fair value of SAR 580,000.

Answer:

Exercise 2 (4 Marks)

Al jouf Township decides to construct a new city hall. Based on the following data, prepare a statement of revenues, expenditures, and changes in fund balance for Al jouf Township's Capital Projects Fund. All transactions occur within the calendar year 2018.

a. The Fund starts and ends the year with a zero fund balance.

b. The Fund's financing sources for the city hall project were: long-term bond proceeds SAR4000 000; operating transfer from the General Fund SAR 3000 000 ; state grant -SAR 2000 000; interest from the temporary investment of cash - SAR 70,000.

c. Total outlays for constructing the new city hall were: construction costs SAR8 200 000;design and construction supervision fees SAR600 000.

d. City laws require that, whenever bonds are used, any remaining difference between total financing sources and construction costs must be transferred to the Debt Service Fund. Therefore, SAR 270 000 was transferred to the Debt Service Fund.

Answer:

Exercise 3 (2 Marks)

The following information is extracted from the City of Jeddah government-wide statement of net position at December 31, 2018:

Capital assets 3,000,000

Accumulated depreciation, capital assets 1,600,000

Annual depreciation rate on capital assets 10 %

Bonds payable -0-

The following information is extracted from the city's governmental funds statement of revenues, expenditures, and changes in fund balances for the year ended December 31, 2018.

Expenditures - bond principal (Debt Service Fund) 60,000

Proceeds of debt (Capital Projects Fund) 600,000

Required:

a. Prepare journal entries so the foregoing information can be used in a work sheet to prepare government-wide financial statements for the year ended December 31, 2018.