Problem 16-6 (LO 1, 4) Special assessments, capital projects fund, debt service fund, effect on other funds/groups. You are given the following post-closing trial balance for the Special Assessment Capital Projects Fund of the city of Stone Creek as of January 1, 2018. The project was started last year and should be completed in June of 2018.

Debit Credit

Cash ......................................................... 290,000

ContractsPayableRetainedPercentage............................. 60,000

Fund BalanceRestricted ......................................... 150,000

Fund BalanceAssignedforEncumbrance ........................... 80,000

Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290,000 290,000

The special assessments are collected by the debt service fund, which also makes payments of principal and interest on special assessment bonds. The city has guaranteed payment of the debt in the event of nonpayment by the special assessment property owners. The debt service fund has the following balances, shown on next page, on January 1, 2018.

Debit Credit

Cash......................................................... 20,000

SpecialAssessmentsReceivableCurrent............................ 250,000

SpecialAssessmentsReceivableNoncurrent......................... 250,000

Revenues...................................................... 250,000

DeferredInflowsofResources...................................... 250,000

FundBalanceRestrictedforDebtService............................ 20,000

Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250,000 250,000

The following events occurred during 2018:

January 2 The city adopted an operating budget for 2018 construction activities. Expenditures are estimated at $223,400, including amounts encumbered in the prior year. Budgetary accounts are used.

January 5 Prior-year encumbrances are restored, and new encumbrances of $108,000 are recorded.

February 1$220,000 of current special assessments are collected, along with interest of $17,600. Interest of $2,400 was billed on the uncollected current assessments, which were classified as delinquent.

February 28- $140,000 was paid on outstanding special assessment bonds, including interest of $15,000.

March 14 Delinquent special assessments and interest thereon of $2,650 were collected.

May 1----Expenditures of $220,000 were vouchered to Contracts Payable. The usual 5% retained percentage was entered. The project is now complete at a total cost of $896,000.

May 10-- A check for $150,000 was issued to the contractor.