MULTI-FUND PROBLEM

You are a Hometown accountant. The Capital Project Fund has just been created to account for resources received and expended for the construction of a new Health Center. Funding for the Health Center is being provided by a $5,000,000 General Obligation Bond sale, a direct transfer from the General Fund, and a Federal Grant. The grant terms provide that the Federal Government will pay only up to 20% of all project expenditures incurred; unused funds must be returned at the completion of the project.

Required Elements (total 50 points) :

(31 pts) Journalize the requested transactions for the

Capital Project Fund

Debt Service Fund

General Fund

(9 pts) Prepare a trial balance for the Capital Projects Fund.

(5 pts) Prepare closing entries for the Capital Projects Fund.

(5 pts) Provide the missing values for the Capital Projects Fund Financial statements.

Hometowns Council has adopted the following project budget.

$ 3,000,000 General Fund Operating Transfer

5,000,000 General Obligation Bonds

2,000,000 Estimated Federal Grant

10,000,000 Appropriations

(3 pts) Record The adoption of the Capital Projects Fund budget.

FUND

Account Name

Debit

Credit

(2 pts) Record the signing of the project contracts for all planned appropriations.

FUND

Account Name

Debit

Credit

(5 pts) The General Fund transfered $3,000,000 in cash to Capital Projects Fund. An advance on the Federal grant was received for the full estimated grant amount. Record the related journal entry(entries).

FUND

Account Name

Debit

Credit

(6 pts) $5,100,000 was received in proceeds on the sale of the $5,000,000 Project Bond. The Debt Service Fund will manage the Bond payments. Record the related journal entry(entries).

FUND

Account Name

Debit

Credit

(7 pts) Final contracted construction and architect bills totaling $9,750,000 were approved and vouchered, less a 5% retention holdback on the construction bills, which will be paid when the project passes final detail inspection. Record the related journal entry(entries).

FUND

Account Name

Debit

Credit

(3 pts) The new Health Center has passed its last detailed inspection and approval has been received to pay all remaining amounts owed the contractor (payables and retention). Record the journal entry for the payments.

FUND

Account Name

Debit

Credit

(5 pts) You transfered any unused bond proceeds to the Debt Service Fund and returned unused grant dollars to the Federal government. Record the related journal entry(entries).

FUND

Account Name

Debit

Credit