Hello please provide assistance with the following:

A. Answer the following multiple choice questions and explain why you selected the choice that you did.

1. In 2015 Better City received $5,000,000 of bond proceeds to be used for capital projects. Of this amount, $1,000,000 was expended in 2015. Expenditures for the $4,000,000 balance were expected to be incurred in 2016. These bond proceeds should be recorded in capital projects funds for

a. $5,000,000 in 2015 The is

2. Financing for the renovation of Central Citys municipal park that was begun and completed during 2015 came from the following sources:

Grant from state government $400,000

Proceeds from general obligation bond issue 500,000

Transfer from Central Citys general fund 100,000

In its 2015 capital projects fund operating statement Central should report these amounts as:

Revenues Other financing sources

a. $1,000,000 $0

b. 900,000 100,000

c. 400,000 600,000

d. $0 1,100,000

3. In which of the following fund types of a city government are revenues and expenditures recognized on the same basis of accounting as the general fund?

a. Pension trust

b. Internal service

c. Enterprise

d. Debt service

4. Dade City issued $1,000,000 general obligation bonds at 101 to build a new city hall. As part of the bond issue, the city also paid a $500 underwriter fee and $2,000 in debt issue costs. What amount should Dade City report as other financing sources?

a. $1,010,000

b. $1,008,000

c. $1,007,500

d. $1,000,000

5. Eagle City is accumulating financial resources that are legally restricted to payments of general long-term debt principal and interest maturing in future years. At December 31, 2015 $5,000,000 has been accumulated for principal payments and $300,000 has been accumulated for interest payments. These restricted funds should be accounted for in the

Debt service fund General fund

a. $0 $5,300,000

b. $300,000 $5,000,000

c. $5,000,000 $300,000

d. $5,300,000 $0

6. Receipts from a special tax levy to retire and pay interest on general obligation bonds should be recorded in which fund?

a. General

b. Capital projects

c. Debt service

d. Special revenue

7. The debt service fund of a governmental unit is used to account for the accumulation of resources for, and the payment of, principal and interest in connection with a Trust fund Proprietary fund

a. No No

b. No Yes

c. Yes Yes

d. Yes No

8. Franklin Citys serial bonds are services through a debt service fund with cash provided by the general fund. In a debt service funds statements, how are cash receipts and payments reported?

Cash receipts Cash payments

a. Revenues Expenditures

b. Revenues Other Financing Uses

c. Other Financing Sources Expenditures

d. Other Financing Sources Other Financing Uses

B. In 2016 Jerry City annexes a recently developed subdivision and commits to extend sewer lines to the area. The estimated cost is $10.0 million. The project is to be funded with $8.5 million in special assessment bonds and a $1.0 million reimbursement grant from the state. The balance is to be paid by the government out of its general fund. Property owners are to be assessed an amount sufficient to pay both principal and interest on the debt (bonds). The construction and financing phase of a special assessment project is accounted for in a capital projects fund, and the debt service phase is accounted for in a debt service fund (see the next problem -

C). During the year, the government engaged in the following transactions, all of which would be recorded in a capital projects fund.

Requirements:

a. Prepare appropriate journal entries for the capital projects fund.

b. Prepare a statement of revenues, expenditures, and changes in fund balance for the capital projects fund.

c. Prepare a year-end (December 31) balance sheet for the capital projects fund.

Use the following account titles for your journal entries:

Cash

Bond Issue Costs

Other Financing Sources Bond Proceeds (face value)

Other Financing sources Bond Premium

Other Financial Uses Nonreciprocal Transfer to Debt Service Fund

Due to Debt Service Fund

State Grant Received in Advance (Liability)

Revenue State Grant

Investments

Investment Interest Revenue

Encumbrances

Reserve for Encumbrances

Expendables Construction

Due to Contractor (Retainage Payable)

The following are the transactions for the year:

1. Jerry City issued $8.5 million in bonds at a premium of $0.30 million and incurred $0.18 million in issue costs. The premium, net of issue costs, is to be transferred to a newly established debt service fund. Bond proceeds and bond premium are recorded in the Capital Projects Fund. The premium is originally recorded in the Capital Projects Fund as Other Financing Uses Nonreciprocal Transfer to Debt Service Fund and Due to Debt Service Fund. The premium is transferred to the debt service fund later in the year. The journal entry is prepared to record the issuance of the bonds; a second journal entry is prepared to record obligation to debt service fund for bond premium, net of issue costs.

2. Jerry City received the $1.0 million grant from the state, recognizing it as a liability until Jerry City incurred at least $1.0 million in construction costs. Note: Jerry City incurs the construction costs later in the year, before year end.

3. Jerry City invested $7.62 million in short-term (the investment will be held less than one year) securities.

4. Jerry City issued purchase orders and signed construction contracts for $9.2 million. There are encumbrances examples in a previous chapter.

5. Jerry City sold $5.0 million of its investments for $5.14 million; the excess of selling price over cost represents interest earned.

6. Jerry City received invoices from its prime contractor totaling $5.7 million. As permitted by its agreement with its prime contractor, Jerry City retained (and recorded as a payable) $0.4 million due to contractor (retainage payable) pending satisfactory completion of the project. Jerry City paid the balance of $5.3 million.

7. Jerry City transferred $0.12 million to the debt service fund. This closes the Due to Debt Service Fund that was recorded in journal entry #1.

8. Jerry City had the following year end accruals:

a. By year-end the investments still on hand had increased in value by $0.06 million, an amount also attributable to interest earned. Jerry city can accrue investment interest revenue

b. Jerry City incurred $1 million in expenditures in construction costs that was a requirement of being able to recognize revenue from the $1.0 million state grant. Jerry City can now recognize the state grant revenue for $1.0 million.

Use the following format for the Statements of Revenues, Expenditures and Changes in Fund Balances. Remember to complete the appropriate titles and amounts in the financial statements. It may help you to use T accounts to summarize the journal entries before preparing the financial statements.

Jerry City

Capital Project Fund

Statement of Revenues, Expenditures, and Changes in Fund Balances

For Year Ending December 31, 2016

Capital Project

Use the following format for the Balance Sheet.

Jerry City

Capital Project Fund

Balance Sheet

As of December 31, 2016

Capital Project

C. This is a continuation of the Jerry City subdivision from part B. The debt service phase special assessment bonds are accounted for in a debt service fund. As stated in the previous problem B, Jerry City issued $8.5 million of special assessment bonds to finance a sewer-extension project. To service the debt, it assessed property owners $8.5 million. Their obligations are payable over a period of five years, with annual installments due on March 31 of each year. Interest at an annual rate of 8 percent is to be paid on the total balance outstanding as of that date. The bonds require an annual principal payment of $1.57 million each year for five years, due on December 31. In addition, interest on the unpaid balance is payable twice each year, on June 30 and December 31 at an annual rate of 8 percent. Jerry City The government agreed to make up from its general fund the difference between required debt service payments and revenues. At the start of the year, the government established a debt service fund. . During the year Jerry City engaged in the following transactions that affect the debt service fund.

Requirements:

a. Prepare appropriate journal entries for the debt service fund. Although Jerry City would prepare a statement of revenues, expenditures, and changes in fund balance, as well as a balance sheet you do not need to prepare the financial statements.

Use the following account titles for your journal entries, as appropriate:

Cash

Bond Issue Costs

Other Financing Sources Bond Proceeds (face value)

Other Financing sources Bond Premium

Other Financial Uses Nonreciprocal Transfer to Debt Service Fund

Due to Debt Service Fund

State Grant Received in Advance (Liability)

Revenue State Grant

Investments

Investment Interest Revenue

Encumbrances

Reserve for Encumbrances

Expendables Construction

Due to Contractor (Retainage Payable)

Assessment Receivable

Allowance for Uncollectible Receivables

Assessments Not Yet Recognized as Revenue (Deferred Inflow of Resources)

Due from Capital Projects Fund

Other Financing Sources Nonreciprocal Transfer from Capital Projects Fund

Interest Revenue, Assessments

Revenue from Assessments

Expenditure Debt Service, Interest

Expenditure Debt Service, principal

Matured Interest Payable

Matured Bonds Payable

The following are the transactions for the year:

1. Jerry City recorded the $8.5 million of assessments receivable, estimating that $0.2 million would be uncollectible. The entry to record the assessment receivable was recorded; the recognition of revenue is deferred until the measurable and available criteria are satisfied.

2. The special assessments bonds were issued at a premium (net of issue costs) of $0.12 million.

The bond was recognized in the Capital Projects Fund in B above. Jerry City recognized the anticipated transfer of the premium to the debt service fund. Due from Capital Projects Fund and Other Financing Sources Nonreciprocal Transfer from Capital Projects Fund was recorded in the Debt Service Fund.

3. During the year Jerry City collected $2.0 million in assessments and $0.4 million in interest (with a few property owners paying their entire assessment in the first year). Jerry City recorded the collection of assessments and interest in the Debt Service Fund.

4. Jerry City transferred $0.12 million cash (the premium) from the capital projects fund. The anticipated transfer was recorded in #2 above.

5. Jerry City purchased $0.8 million of six-month treasury bills as a temporary investment.

6. Jerry City made its first semi-annual interest payment of $0.34 million.

7. Jerry City sold the investments for $0.85 million, the difference between selling price and cost representing interest earned.

8. Jerry City recognized its year-end obligation for interest the semi-annual interest of $0.34 million and principal of $1.7 million, but did not actually make the required payments. Jerry City recognized the expenditures for interest and principal at the end of the year.