P7-4(GL and SL Entries; Trial Balances; Statements) The following transactions and events relate to the Harmer Independent School District High School Building Captial Projects Fund during 20X6.

1. The school board appropriated $9,000,000 to construct and landscape a new regional high school building to be finance as follows:

Bond issue proceeds	$6,000,000
Federal grant (for 20% of cost)	1,800,000
State grant	700,000
Transfer from General Fund	500,000
Total	$9,000,000

2. Contracts were let to private contractors:

Structure	$4,700,000
Plumbing and heating	1,800,000
Electrical	1,300,00
Total	$7,825,000

Thus, the plumbing and heating appropriation was increased $25,000, and the structure appropriation was decreased $300,000.

3. Cash receipts during 20X6 included:

Federal grant	$250,000
State grant	350,000
Bond issue proceeds (par $2,000,000)	2,020,000
Transfer from General Fund	100,000
Total	$2,720,000

The federal grant is for 20% of actual qualifying costs incurred (expenditure-driven) up to its $1,800,000 maximum, but the state grant is an outright contribution to the project. The remaining bonds authorized only part of the General Fund transfer but is expected to authorize the remainder during 20X7.

4. Invoices from contractors were received, approved, and vouchered for payment less a 5% retained percentage:

Structure	$2,000,000
Plumbing and heating	500,000
Electrical	700,000
Other (not encumbered)	50,000
Total	$3,250,000

5. The school board borrowed $150,000 for the project on a short-term note form First State Bank of Harmer.

6. Cash disbursements during 20X6 included

Vouchers Payable		$2,600,000
Payroll:
Landscaping	$120,000
Other	80,000	200,000
Machinery charges- Landscaping		50,000
Total		$2,850,000

7. The school board billed the federal government for the balance of its shares of project costs incurred to date. Payment from the federal agency is expected in 20X7.

8. Accrued interest payable on the note at the year end was $4,000. Interest expenditures on this note are considered a project cost (other) but are not reimbursable under terms of the federal grant.

The following transactions and events relate to the Harmer Independent School District High School Building Capital Projects Fund during 20X7.

1. Cash receipts during 20X7 included:

Bond issue proceeds (par less $15,000 if bond issue costs)	$3,985,000
Federal grant	1,440,000
State grant	350,000
Transfer from General Fund	375,000
Total	$6,150,000

2. Final invoices from contractors were received, approved, and vouchered for payment minus a 5% retained percentage:

Structure	$2,750,000
Plumbing and heating	1,325,000
Electrical	600,000
Landscaping (not encumbered)	400,000
Total	$5,075,000

3. Cash disbursement during 20X7 included:

Vouchers Payable		$5,308,750
Short-term note payable (including interest)		160,000
Transfer of net bond issue premium to Debt Service Fund		5,000
Payroll:
Landscaping	$75,000
Other	62,000	137,000
Machinery charges - Landscaping		$60,000
Total		$5,670,750

4. The federal government was billed for the balance of its share of qualifying project costs (excluding interest expenditures).

5. The school board received final payment on the federal grant as billed, except for $400 disallowed because of a $2,000 unallowable cost included in the billing.

6. The high school building was inspected, approved, and accepted by the school board. Accordingly, the retained percentages were paid to the contractors.

7. The remaining cash was transferred to the Debt Service Fund.

8. The High School Building Capital Projects Fund accounts were closed, and the fund was terminated.

a. Prepare the journal entries to record the 20X6 and 20X7 transactions and events in the General Ledger, Revenues Ledger, and Expenditures Ledger of the Harmer Independent School District High School Building Capital Projects Fund. (Detailed General Ledger accounts may be used instead of the subsidary ledgers, if desired.)

b. Prepare a balanced sheet for the Harmer Independent School District Capital Projects Fund as of the end of 20X6 and a Statement of Revenues, Expenditures, and Changes in Fund Balance for the 20X6 fiscal year.

c. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual for the High School Building Capital Projects Fund for the 20X6-20X7 period. The columns of the statement should be headed:

Actual Budget(Revised) Variance- Favorable (Unfavorable)

20X7

20X6

Total