Question

The citizens of Spencer County approved the issuance of $2,003,000 in 6 percent general obligation bonds to finance the construction of a courthouse annex. A capital projects fund was established for that purpose. The preclosing trial balance of the courthouse annex capital project fund follows:

Trial Balance-December 31, 2017	Debits	Credits
Cash	$905,000
Contracts payable		$550,000
Due from state government	188,000
Encumbrances	105,000
Expenditures-capital	1,851,000
Intergovernmental grant		391,000
OFS: premium on bonds		54,000
OFS: proceeds sale of bonds		2,003,000
Budgetary fund balance-Reserve for encumbrances		105,000
OFU: Transfer out	54,000
	$3,103,000	$3,103,000

a. Prepare any closing entries necessary at year-end

b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the courthouse annex capital project fund.

c. Prepare a Balance Sheet for the courthouse annex capital project fund, assuming all unexpended resources are restricted to construction of the courthouse annex.

Answer 1

A)

Journal	debit	credit
Other financing sources - premium on bond	$54000
Other financing sources - proceeds from bond	$2003000
Intergovernmental revenue	$391000
To other financing uses - transfers out		$54000
To fund balance		$543000
To capital expenditure		$1851000
Budgetary fund balance - reserves from encumbrance	$105000
To encumbrances		$105000

B)

REVENUES:
Intergovernmental grants	$391000
EXPENDITURES:
Capital outlay	$1851000
Excess(deficiency) of revenue over expenditure	($1460000)
Other financing sources (uses)
Proceeds of bonds	$2003000
Bond premium	$54000
Transfer out	($54000)
Total other financing sources (uses)	$2003000
Net change in fund balance	$543000
Op. Fund balance	$0
Cl. Fund balance	$543000

C)

BALANCE SHEET

ASSETS:
Cash	$905000
Dues from state government	$188000
Total assets	$1093000
LIABILITIES:
Contract payable	$550000
FUND BALANCE:
Restricted for courthouse annex	$543000(reference - part b)
Total liabilities and fund balance	$1093000

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