Question

The City of Grinders Switch maintains its books in a manner that facilitates the preparation of fund accounting statements and uses worksheet adjustments to prepare government-wide statements.

1. General fixed assets as of the beginning of the year, which had not been recorded, were as follows:

Land	$7,691,000
Buildings	33,359,300
Improvements Other than Buildings	14,821,900
Equipment	11,555,500
Accumulated Depreciation, Capital Assets	25,303,300

2. During the year, expenditures for capital outlays amounted to $7,501,000. Of that amount, $4,800,600 was for buildings; the remainder was for improvements other than buildings.
3. The capital outlay expenditures outlined in (2) were completed at the end of the year (and will begin to be depreciated next year). For purposes of financial statement presentation, all capital assets are depreciated using the straight-line method, with no estimated salvage value. Estimated lives are as follows: buildings, 40 years; improvements other than buildings, 20 years; and equipment, 10 years.
4. In the governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balances, the City reported proceeds from the sale of land in the amount of $600,100. The land originally cost $505,100.
5. At the beginning of the year, general obligation bonds were outstanding in the amount of $4,002,000. Unamortized bond premium amounted to $19,000. Note: This entry is not covered in the text, but is similar to entry 9 in the chapter.
6. During the year, debt service expenditures for the year amounted to: interest, $612,200; principal, $434,900. For purposes of government-wide statements, $1,900 of the bond premium should be amortized. No adjustment is necessary for interest for interest accrual.
7. At year-end, additional general obligation bonds were issued in the amount of $1,794,400, at par.

Required:

Prepare the journal form, worksheet adjustments for each of the above situations. (If no entry is required for a transaction/event, select “No Journal Entry Required” in the first account field. Round your answers to the nearest whole dollar).

Answer 1

CITY OF GRINDERS SWITCH WORKSHEET ENTRIES
Sl. No.	Particulars	Debit ($)	Credit($)
1	Land	7,691,000
	Buildings	33,359,300
	Improvements Other Than Buildings	14,821,900
	Equipment	11,555,500
	Accumulated Depreciation, Capital Assets		25,303,300
	Net Position		42,124,400
2	Buildings	4,800,600
	Improvements other than buildings	2,700,400
	Expenditures - Capital Outlay		7,501,000
3	Depreciation Expense	2,730,275
	Accumulated Depreciation - Buildings (33,359,300 /40)		833,982.5
	Accumulated Depreciation - Improvements other than buildings (14,821,900 / 20)		741,095
	Accumulated Depreciation - Equipment (11,555,500 /10)		1,155,550
4	Special Item - Proceeds from sale of land	600,100
	Land		505,100
	Special Item - Gain from sale of land		95,000
5	Net Position	4,021,000
	Bonds Payable		4,002,000
	Premium on Bonds Payable		19,000
6	Premium on Bonds Payable	1,900
	Interest Expense		1,900
	Bonds Payable	434,900
	Expenditures - Principal		434,900
7	Other Financing Sources - Proceeds of Bonds	1,794,400
	Bonds Payable		1,794,400