P7-1 Identify the best answer for each of the following: Questions 1 through 3 are based on the following scenario: Matthew County issued a 6-month, 6%, $1,000,000 bond anticipation note on March 31, 20X5, to provide temporary financing for a major general government capital project. The issuance of long-term bonds had not yet received the legally required voter approval when the financial statements were issued, but most agree the voters will approve the referendum. However, in the event that the voters reject the long-term bond issue, the county has other sources it can use to finance the project. Assuming the county has incurred $800,000 of construction costs on the project by the end of its fiscal year (June 30, 20X5), the fund balance of the Capital Projects Fund used to account for this project would be $185,000. $200,000. ($800,000). ($815,000). Assume voter approval has in fact occurred as of the end of the fiscal year and all other legal requirements related to the bond issuance have been met. The county issued the bonds after the balance sheet date (June 30, 20X5), but before the financial statements were issued and soon enough to use the bond proceeds to repay the bond anticipation notes. As of June 30, 20X5, the county should report fund balance in this Capital Projects Fund of $185,000. $200,000. $800,000 deficit. $815,000 deficit. Assume the BANs in question 2 were repaid when due from the proceeds of the bonds. The expenditures reported in the Capital Projects Fund for the repayment of the bond anticipation note principal and interest in the fiscal year ended June 30, 20X6, would be $0. $30,000. $1,000,000. $1,030,000.Questions 4 and 5 are based on the following scenario: Robeson County has a Capital Projects Fund for its courthouse renovations. The appropriation authority for the fund continues until the end of the project. The voters approved a bond issue for the specific purpose of financing courthouse renovations, and the county commissioners committed a revenue source specifically for that purpose. The commissions policy is that expenditures are presumed to be made first from bond proceeds, then from the committed revenue source. The fund has the following balances as of September 30, 20X8, its first fiscal year end: Revenues $1,500,000 Bond proceeds (face amount) $5,000,000 Expenditures $1,500,000 Encumbrances $8,000,000 Appropriations $9,500,000 Fund Balance should be reported as follows at September 30, 20X8: Restricted, $5,000,000. Assigned (by voters) $5,000,000. Restricted, $3,500,000 and Committed $1,500,000. Committed, $1,500,000 and Assigned, $3,500,000. Assume that $1,500,000 of unassigned General Fund resources were transferred to the Capital Projects Fund from the General Fund to provide financing instead of the commission committing revenues specifically to the project. How should Fund Balance as of September 30, 20X8, be reported? Restricted, $5,000,000. Assigned (by voters) $5,000,000. Restricted, $3,500,000 and Assigned, $1,500,000. Restricted, $3,500,000 and Unassigned, $1,500,000.Questions 6 through 9 are based on the following information: The City of Cole is installing a lighting system in the Harvey Subdivision, which is considered to be a major general government capital project for the city. The system is being financed by levying $500,000 of special assessments on benefited property owners and transferring $750,000 (in the next year) from the General Fund. $100,000 of these assessments were due and collected during the current year. Also, as of the end of the fiscal year, the city had incurred expenditures of $750,000 on the project. What amount of special assessment revenues should be reported in the Capital Projects Fund as of the end of the current year? $0Special assessments should be accounted for in a Special Revenue Fund. $100,000. $500,000. $0Special assessments should be accounted for as other financing sources, not revenues. The effect of the preceding transactions on the net change in fund balance of the Capital Projects Fund for the fiscal year would be a decrease of $750,000. a decrease of $250,000. a decrease of $650,000. an increase of $500,000. Assume that instead of levying the special assessments to finance a portion of the project, the city issued $500,000 of five-year, 6% notes payable six months before the end of the fiscal year. The net effect of the note issuance, as well as the incurred expenditures, on the net change in fund balance of the Capital Projects Fund for the fiscal year would be a decrease of $750,000 because the notes payable would be reported as a direct fund liability in the Capital Projects Fund. an increase of $500,000. The incurred expenditures would actually be reported as an increase to assets as the system will be a capitalized asset when it is completed. a decrease of $265,000. Expenditures as of the end of the fiscal year would include six months of accrued interest on the debt. a decrease of $250,000. Assume that instead of levying the special assessments to finance a portion of the project, the city levies the special assessments to pay for the notes payable issued in Item 8. Of the $500,000 of special assessments levied, $100,000 is due and collected during the first year. What amount of special assessment revenues should be recognized in the Capital Projects Fund as of the end of the first fiscal year? $0. The special assessments should be reported in a Debt Service Fund. $0. Special assessments should be reported as other financing sources, not as revenues. $100,000. $500,000. Luke County issued $20,000,000 par of capital improvement bonds for a general government project. The bonds were issued at a discount of 2% of par. The bond indenture requires that $500,000 of the proceeds be set aside for future debt service. These transactions should be reflected in the countys Capital Projects Fund as other financing sourcesbonds, $20,000,000. other financing sourcesbonds, $19,600,000. other financing sourcesbonds, $20,000,000; other financing usesbond discount, $400,000; other financing usestransfers out, $500,000. other financing sourcesbonds, $19,600,000; debt service expenditures$500,000.