ACCT 567 Homework Week 3 Accounting for Government and NFP Keller 100% Correct studentswithsolutions/view-tutorial.aspx?TutorialId=14739 Problem 5-3 City of Fordache General Capital Assets. Make all necessary entries in the appropriate governmental fund general journal and the government-wide governmental activities general journal for each of the following transactions entered into by the City of Fordache. 1. The city received a donation of land that is to be used by Parks and Recreation for a park. At the time of the donation, the land had a fair value of $5,200,000 and was recorded on the donor’s books at a historical cost of $4,500,000. 2. The Public Works Department sold machinery with a historical cost of $35,100 and accumulated depreciation of $28,700 for $6,400. The machinery had originally been purchased with special revenue funds. 3. A car was leased for the mayor’s use. Since the term of the lease exceeded 75 percent of the useful life of the car, the lease was capitalized. The first payment was $550 and the present value of the remaining lease payments was $30,000. 4. During the current year, a capital projects fund completed a new public safety building that was started in the prior year. The total cost of the project was $9,720,000. Financing for the project came from a $9,000,000 bond issue that was sold in the prior year, and from a $720,000 federal capital grant received in the current year. Current year expenditures for the project totaled $1,176,000. The full cost is attributed to the building since it was constructed on city-owned property. 5. Due to technological developments, the city determined that the service capacity of some of the technology equipment used by general government had been impaired. The calculated impairment loss due to technology obsolescence was $1,156,000. Problem 5-7 Erikus County Recording Capital Projects Fund Transactions. In Erikus County, the Parks and Recreation Department constructed a library in one of the county’s high growth areas. The construction was funded by a number of sources. Below is selected information related to the funding and closing of the Library Capital Project Fund. All activity related to the library construction occurred within the 2011 fiscal year. 1. The county issued $6,000,000, 4 percent bonds, with interest payable semiannually on June 30 and December 31. The bonds sold for 101 on July 30, 2010. Proceeds from the bonds were to be used for construction of the library, with all interest and premiums received to be used to service the debt issue. 2. A $650,000 federal grant was received to help finance construction of the library. 3. The Library Special Revenue Fund transferred $250,000 for use in construction of the library. 4. A construction contract was awarded in the amount of $6,800,000. 5. The library was completed on June 1, 2011, four months ahead of schedule. Total construction expenditures for the library amounted to $6,890,000. When the project was completed, the cost of the library was allocated as follows: $200,000 to land, $6,295,000 to building, and the remainder to equipment. 6. The capital projects fund was closed. It was determined that remaining funds were related to the bond issue, and thus they were appropriately transferred to the debt service fund. Required Make all necessary entries in the capital projects fund general journal and the governmental activities general journal at the government-wide level. Problem 5-8 Annette County Statement of Revenues, Expenditures, and Changes in Fund Balance. The pre-closing trial balance for the Annette County Public Works Capital Project Fund is provided below. Required a. Prepare the June 30, 2011, statement of revenues, expenditures, and changes in fund balance for the capital projects fund. b. Has the capital project been completed? Explain your answer. Problem 6-5 City of Appleton Statement of Legal Debt Margin. In preparation for a proposed bond sale, the city manager of the City of Appleton requested that you prepare a statement of legal debt margin for the city as of December 31, 2010. You ascertain that the following bond issues are outstanding on that date: You obtain other information that includes the following items: 1. Assessed valuation of real and taxable personal property in the city totaled $240,000,000. 2. The rate of debt limitation applicable to the City of Appleton was 8 percent of total real and taxable personal property valuation. 3. Electric utility, water utility, and transit authority bonds were all serviced by enterprise revenues, but each carries a full-faith-and-credit contingency provision. By law, such self-supporting debt is not subject to debt limitation. 4. The convention center bonds and tax increment bonds are subject to debt limitation. 5. The amount of assets segregated for debt retirement at December 31, 2010, is $1,800,000. Problem 6-8 New Town Serial Bond Debt Service Fund Journal Entries and Financial Statements. As of December 31, 2010, New Town had $9,500,000 in 4.5 percent serial bonds outstanding. Cash of $509,000 is the debt service fund’s only asset as of December 31, 2010, and there are no liabilities. The serial bonds pay interest semiannually on January 1 and July 1, with $500,000 in bonds being retired on each interest payment date. Resources for payment of interest are transferred from the General Fund and the debt service fund levies property taxes in an amount sufficient to cover principal payments. Required a. Prepare debt service fund and government-wide entries in general journal form to reflect, as necessary, the following information and transactions for FY 2011. (1) The operating budget for FY 2011 consists of estimated revenues of $1,020,000 and estimated other financing sources equal to the amount of interest to be paid in FY 2011. Appropriations must be provided for interest payments and bond redemptions on January 1 and July 1. (2) Cash was received from the General Fund and checks were written and mailed for the January 1 principal and interest payments. (3) Property taxes in the amount of $1,020,000 were levied (no estimate for uncollectible accounts has been made). (4) Property taxes in the amount of $1,019,000 were collected. (5) Cash was received from the General Fund and checks were written and mailed for the July 1 principal and interest payments. (6) Adjusting entries were made and uncollected taxes receivable were reclassified as delinquent. At the fund level, entries were also made to close budgetary and operating statement accounts. (Ignore closing entries in the government activities journal.) b. Prepare a statement of revenues, expenditures, and changes in fund balances for the debt service fund for the year ended December 31, 2011. c. Prepare a balance sheet for the debt service fund as of December 31, 2011.
Posted on: Sun, 24 Nov 2013 09:20:19 +0000
Trending Topics
Recently Viewed Topics
© 2015