Problem 2: capital projects fund financial statement and other questions

Pinehurst County established a capital projects fund at the beginning of 2021 to construct a courthouse. The estimated cost of the courthouse was $3,530,000. Construction will be financed in the following manner:

• Grant from the State $ 500,000
• Issuance of general obligation (G.O.) serial bonds 3,000,000
• Estimated revenue from interest on treasury bills 30,000

The following events occurred during the year ended December 31, 2021:

• County trustees approved the capital budget for the courthouse on January 5, 2021.
• The referendum to issue $3,000,000 of general obligation bonds received voter approval in November, 2020. The bonds were issued for $3,060,000 on January 31. The County trustees authorized the transfer of the premium to a debt service fund. The transfer was made in February.
• In early February, the architectural firm of Hudson and Judson was selected to draw the plans for the courthouse for a fee of $25,000. Plans were submitted in March, and the architectural firm was paid $25,000 in April.
• $2,500,000 of the bond proceeds was invested in short-term treasury bills in April, 2021.

• Pinehurst County signed a contract with Gleeson Construction for $3,420,000 in June, 2021.

It was estimated that it will take 12 months to complete construction of the courthouse.

• In November, 2021, Pinehurst County received a bill from Gleeson Construction for

$1,200,000. The County estimated that the courthouse was 35% complete.

• Pinehurst received the $500,000 grant from the State in December, 2021.
• $1,300,000 of treasury bills matured in December, 2021; interest income on the matured securities amounted to $15,000.
• On December 30, 2021. Gleeson was paid the amount billed less a retainage of 10%.
• Accrued interest income on the $1,200,000 of treasury bills held on December 31, 2021, amounted to $14,000. The interest will be received when the treasury bills mature in February, 2022. This interest is available to pay for expenditures incurred in 2021.

Required:

1. Prepare, in good form, the statement of revenues, expenditures, and changes in fund balance for the courthouse capital projects fund for the year ended December 31, 2021.
2. Answer the following questions that pertain to the balance sheet of the courthouse capital projects fund at December 31, 2021:

1. What is the amount reported for cash?
2. What is the total amount reported for assets?
3. What is the total amount reported for liabilities?
4. What is the level of constraint reported for fund balance?

In the notes to the financial statements, how will the construction expenditures be reported in the capital asset note