QUESTION 1 Please answer the following six (6) questions using the information provided below. On January 1, 2020 the City of Verona issued $3,000,000 of 4% term bonds at 100 to construct a new city office building. The fiscal year for the city ends on December 31. The bonds mature in five years on January 1, 2025. Interest on the bonds is payable semiannually on January 1 and july 1. A sinking fund is to be established with the first addition to be made on December 31, 2020. Cash for the sinking fund additions and the semiannual interest payments will be transferred from the General Fund shortly before the due dates. City officials assume a yield on sinking fund investments of 5%. The city has provided the following amortization schedule for the sinking fund investment: Investment Additions Date 31-Dec-20542,889 31-Dec-21 542,889 31-Dec-22 542,889 Expected increase Earnings 10 1542,889 27,144 570,033 55,646 1598,535 Ending Balance 542,889 1,112,922 1,711,458 The investment in (additions to) sinking fund in the table above is calculated using: Future value of ordinary annuity factor for 5 periods at 4%. Present value of ordinary annuity factor for 10 periods at 2%. Present value of ordinary annuity factor for 10 periods at 2.5%. Future value of ordinary annuity factor for 5 periods at 5%. QUESTION 2 On January 1, 2020 the City of Verona issued $3,000,000 of 4% term bonds at 100 to construct a new city office building. The fiscal year for the city ends on December 31. The bonds mature in five years on January 1, 2025. Interest on the bonds is payable semiannually on January 1 and july 1. A sinking fund is to be established with the first addition to be made on December 31, 2020. Cash for the sinking fund additions and the semiannual interest payments will be transferred from the General Fund shortly before the due dates. City officials assume a yield on sinking fund investments of 5%. The city has provided the following amortization schedule for the sinking fund investment: increase Investment Additions Date 31-Dec-20 542,889 31-Dec-21 542,889 31-Dec-22 542,889 Expected Earnings 0 27,144 55,646 542,889 570,033 1598,535 Ending Balance 542,889 1,112,922 11,711,458 The amount in the budget entry for 2021 debit or credit to budgetary fund balance or fund balance-restricted, whichever is applicable, is: $662,889 $570,033 $692,889 $542,889 QUESTION 3 On January 1, 2020 the City of Verona issued $3,000,000 of 4% term bonds at 100 to construct a new city office building. The fiscal year for the city ends on December 31. The bonds mature in five years on January 1, 2025. Interest on the bonds is payable semiannually on January 1 and july 1. A sinking fund is to be established with the first addition to be made on December 31, 2020. Cash for the sinking fund additions and the semiannual interest payments will be transferred from the General Fund shortly before the due dates, City officials assume a yield on sinking fund investments of 5%. The city has provided the following amortization schedule for the sinking fund investment: Investment Additions increase Date 31-Dec-20 542,889 31-Dec-21 542,889 31-Dec-22/542,889 Expected Earnings 10 27,144 155,646 542,889 570,033 1598,535 |Ending Balance 542,889 1,112,922 11,711,458 The budget entry for fiscal year 2021 will include: Debit to estimated other financing uses of $120,000. Debit to appropriations of $150,000 Credit to estimated other financing uses $150,000. Credit to appropriations of $120,000. QUESTION 4 On January 1, 2020 the City of Verona issued $3,000,000 of 4% term bonds at 100 to construct a new city office building. The fiscal year for the city ends on December 31. The bonds mature in five years on January 1, 2025. Interest on the bonds is payable semiannually on January 1 and july 1. A sinking fund is to be established with the first addition to be made on December 31, 2020. Cash for the sinking fund additions and the semiannual interest payments will be transferred from the General Fund shortly before the due dates. City officials assume a yield on sinking fund investments of 5%. The city has provided the following amortization schedule for the sinking fund investment: Investment Additions expected Date Earnings 31-Dec-20 542,889 0 31-Dec-21 542,889 27,144 31-Dec-22542,889 155,646 increas ase 542,889 570,033 1598,535 Ending Balance 1542,889 1,112,922 11,711,458 The budget entry in the debt service fund for the fiscal year 2021 would include: A debit to estimated other financing sources. A credit to estimated other financing sources. A credit to revenue. A credit to estimated revenue. QUESTION 5 On January 1, 2020 the City of Verona issued $3,000,000 of 4% term bonds at 100 to construct a new city office building. The fiscal year for the city ends on December 31. The bonds mature in five years on January 1, 2025. Interest on the bonds is payable semiannually on January 1 and july 1. A sinking fund is to be established with the first addition to be made on December 31, 2020. Cash for the sinking fund additions and the semiannual interest payments will be transferred from the General Fund shortly before the due dates. City officials assume a yield on sinking fund investments of 5%. The city has provided the following amortization schedule for the sinking fund investment: Investment Additions Date 31-Dec-20 542,889 31-Dec-21 542,889 31-Dec-22542,889 |Expected Jincrease Earnings 10 542,889 127,144 1570,033 55,646 598,535 Ending Balance 542,889 1,112,922 1,711,458 The budget entry for fiscal year 2021 will include a: Debit to fund balance-restircted. Credit to budgetary fund balance. Debit to budgetary fund balance. Credit to fund balance-restircted. QUESTION 6 On January 1, 2020 the City of Verona issued $3,000,000 of 4% term bonds at 100 to construct a new city office building. The fiscal year for the city ends on December 31. The bonds mature in five years on January 1, 2025. Interest on the bonds is payable semiannually on January 1 and july 1. A sinking fund is to be established with the first addition to be made on December 31, 2020. Cash for the sinking fund additions and the semiannual interest payments will be transferred from the General Fund shortly before the due dates. City officials assume a yield on sinking fund investments of 5%. The city has provided the following amortization schedule for the sinking fund investment: Expected Jincrease Investment Additions Date 31-Dec-20 542,889 31-Dec-21 542,889 31-Dec-22 542,889 Earnings 10 27,144 155,646 1542,889 570,033 598,535 |Ending Balance 542,889 1,112,922 (1,711,458 The budgeted amount that the debt service fund expects to receive from general fund in 2021 for servicing debt is: $692,889. $120,000 $75,000. $662,889