The following transactions took place in the town of Burchette during 20X3: 1. A

Question

The following transactions took place in the town of Burchette during 20X3:
1. A bond issue of $12,000,000 was authorized for the construction of a library, and the estimated bond proceeds and related appropriations were recorded in the General Ledger accounts of a new Capital Projects Fund.
2. The bonds were sold at a premium of $90,000.
3.The cost of issuing the bonds, $80,000, was paid.
4. An order was placed for material estimated to cost $6,500,000.
5. Salaries and wages of $500,000 were paid.
6. The premium, net bond of issuance costs, was transferred to a Debt Service Fund.

The following transactions took place in 20X4:
7. The materials were received, the actual cost was $6,585,000.
8. Salaries and wages of $4,010,000 were paid.
9. All outstanding bills were paid.
10. The project was completed. The accounts were closed, and the remaining balance was transferred to a Debt Service Fund.

a. Prepare all journal entries (budgetary and actual), including closing entries, to record the Capital Projects Fund transfers for 20X3 and 20X4.
b. Prepare a Capital Projects Fund balance sheet as of December 31, 20X3.
c. Prepare a Capital Projects Fund Statement of Revenues, Expenditures, and Changes in Fund Balance for the project, including (1) the year ended December 31, 20X3, and (2) a separate budgetary combined comparison statement for the years ended December 31 20X3 and 20X4.

I need answers to part b and c mainly.

Explanation / Answer

b.

c. (1)

(2)

Capital Project Fund Balance Sheet as of 31st Dec. 20X3 Assets Amount Cash $                 11,590,000 Total $                 11,590,000 Liabilities Amount Debt service Fund Account $                 11,590,000 $                 11,590,000 Debt Service Fund Account as of 31st Dec. 20X3 Bonds Issue cost $ 80,000 Premium on issue of bonds $ 90,000 Balance as on 31st Dec. 20x3 $ 11,510,000 Net of revenues and expenses trf. $ 11,500,000 $ 11,590,000 $ 11,590,000 Balance of Revenues and Expenses Account as of 31st Dec. 20x3 Revenues received by issue of bond $                 12,000,000 Less: Salary and wages paid $ 500,000 Balance of revenue and expenses transferred to DSF Account $                 11,500,000 Cash Account as of 31st Dec. 20x3 Issue of bonds (with premium) $                 12,090,000 Less: Salaries and wages paid $ 500,000 Cash balance as on 31st Dec. 20x3 $                 11,590,000

c. (1)

Capital Project Fund Balance Sheet as of 31st Dec. 20X4 Assets Amount Cash $ 995,000 Total $ 995,000 Liabilities Amount Debt service Fund Account $ 995,000 $ 995,000 Debt Service Fund Account as of 31st Dec. 20X4 Opening balance $ 11,590,000 Balance as on 31st Dec. 20x4 $ 995,000 Net of Revenues and expenses $ (10,595,000) $ 995,000 $ 995,000 Balance of Revenues and Expenses Account as of 31st Dec. 20x4 Revenues $                                   -   Less: Salary and wages paid $                   4,010,000 Materials purchased $                   6,585,000 Balance of revenue and expenses transferred to DSF Account $               (10,595,000) Cash Account as of 31st Dec. 20x4 Cash balance as on 31st Dec. 20x3 $                 11,590,000 Less: Salaries and wages paid $                   4,010,000 Material purchased $                   6,585,000 Cash balance as on 31st Dec. 20x4 $ 995,000

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