P1. The following information pertains to activities for the construction of an office building (the project hereafter) in capital project fund (CPF) of SB city during the fiscal year 2017 ending on 12/31/2017.

The City Council approved its CPF budget for the year ending 12/31/2017, comprising estimated revenues of $7,000,000 and appropriations of $6,800,000.

Approval is obtained for a federal grant of $500,000 as partial funding for the project.

The budget approved for 2017 requires the General Fund (GF) to transfer $100,000 to CPF for the project.

CPF received federal grant of $500,000 in full.

CPF received fund transfer of $100,000 from the GF.

CPF signed a contract with an architectural firm in the amount of $600,000 for the completion of the architectural design for the project.

The architectural firm tendered a final bill for $590,000 to CPF.

GF issued $5,000,000 of 8% serial bond at 102 to finance the project on 1/1/2017. Interest of $400,000 is due on 12/31/2017 and decreasing amounts every12/31 for the next 9 years after that. The principal maturity of $500,000 is due on 12/31/2017.

GF transferred $5,000,000 to CPF and $100,000 to Debt Service fund (DSF) of the SB city out of the proceeds from the issuance of the bond above according to the budget approved for 2017.

GF transferred $900,000 to DSF for debt service which includes $500,000 principal and $400,000 interest according to the budget approved for 2017.

DSF paid $900,000 to bondholders for $500,000 principal and $400,000 interest on 12/31/2017.

CPF signed a contract for the construction of the new office building with a local construction company in the amount of $5,000,000.

The construction company completed the project and tendered its final bill in the amount of $5,200,000 to CPF.

CPF paid the amount due to the construction company except for a 5% retained percentage.

CPF paid its employees as follows in 2017: Gross amount = $80,000. Withheld for

federal government = $20,000, withheld for state government = $10,000, net amount

paid = $50,000.

CPF paid $ 14,000 as employers portion of payroll taxes in 2017.

The following information pertains to property tax transactions in GF of SB City during the fiscal year 2017.

Assume revenues of $ 2,000,000 are required and it is estimated that 1% will be uncollectible. Property tax bills were issued to property owners by GF, accordingly.

GF city has collected $1,900,000 of property taxes billed by the due date.

Interest and penalty of $10,000 are accrued on delinquent taxes, of which 10% is estimated to be uncollectible

Write off $10,000 of delinquent taxes, on which accumulated interest and penalties amount to $1,000.

Instructions:

Prepare any necessary journal entries for the above transactions for respective fund statements and government wide financial statements.

Prepare financial statements for CPF for 2017 presuming that 2017 be the 1st year in operation of CPF.