Jefferson County established a capital project fund in 2019 to build low-income housing with the transfer of $100,000 from the general fund. A portion of that was expended on engineering studies in 2019. the following transactions occurred during 2020:

Capital project fund trial balance:

December 31, 2019

Debit Credit

Cash 72000

Fund balance 72000

1. April 1,2020, 4 percent bonds with a face value of $800,000 were issued in the amount of $817,000. the bond premium was transferred to the debt service fund.

2. the county received notice that it had met eligibility requirements for a federal government grant intended to support the capital project in the amount of $265,000. The cash will be received when the project is completed in February 2021.

3. The county issued a contract for the construction in the amount of $1,030,000

4. The contractor periodically bills the county for construction completed to date. During the year, bills totaling $680,000 were received. By year-end, a total of $605,000 had been paid.

Jefferson County established a debt service fund to make interest and principal payments on the bonds issued in item 1 above. Bond payments are made on October 1 and April 1 of each year. Interest is based on an annual rate of 4 percent. a principal payment of $27,000 is due in 2020. The following occurred during 2020:

5. The bond premium was received by the debt service fund through transfer from the capital project fund.

6. September 30, $43,000 was transferred from the general fund for the October 1 bond payment.

7. The first debt service payment was made on October 1,2020. '

The Elmwood Family Reading enrichment fund was established in December 2019, funded by a bequest with the legal restriction that only earnings, and not principal, can be used for the purchase of books for the James K. Polk Library in Jefferson County. The principal amount that must be maintained is $500,000. the following transactions occurred during 2020:

Permanent Fund trial balance:

December 31, 2019

Debit Credit

Receivable from Grantor $500,000

Nonspendable Fund Balances-Library purchases $500,000

8.The elmwood family pledge of $500,000 was received in donated corporate bonds with a fair value of $370,000 and the balance in cash.

9. $130,000 was invested in the U.S. government securities.

10. Interest in the amount of $16,500 was received in cash during the year.

11. During the year, books totaling $11,500 were ordered for the library.

12. During the year, the library reported receiving books with an invoice amount totaling $11,500, $10,700 of the amounts due for book purchases had been paid by year-end.

13. An additional $700 of interest had accrued on the investments at December 31 and will be received in January of next year.

14. The corporate bonds had a market value of $372,500 and the U.S. securities had a market value of $129,800 as of December 31.

Question:

A) Prepare a Statement of revenues, expenditures, and changes in fund balance for the government funds.

B) Prepare a balance sheet for the government funds, assuming that unexpended spendable resources in the capital projects and permanent funds are classified as restricted and unexpended spendable resources in the debt service fund are classified as assigned.

Textbook:

Essentials of Accounting for Not-for-Profit Organizations

Edition: 14th, Paul A. Copley, McGraw Hill, 2020