MULTI-FUND PROBLEM You are a Hometown accountant. The Capital Project Fund has j
ID: 2457280 • Letter: M
Question
MULTI-FUND PROBLEM
You are a Hometown accountant. The Capital Project Fund has just been created to account for resources received and expended for the construction of a new Health Center. Funding for the Health Center is being provided by a $5,000,000 General Obligation Bond sale, a direct transfer from the General Fund, and a Federal Grant. The grant terms provide that the Federal Government will pay only up to 20% of all project expenditures incurred; unused funds must be returned at the completion of the project.
Required Elements (total 50 points) :
A)(31pts) Journalize the requested transactions for the
a.Capital Project Fund
b.Debt Service Fund
c.General Fund
B)(9pts) Prepare closing entries for the Capital Projects Fund.
C)(10pts) Provide the missing values for the Capital Projects and Debt Service Funds’ financial statements.
Hometown’s Council has adopted the following project budget.
$ 3,000,000 General Fund Operating Transfer
5,000,000 General Obligation Bonds
2,000,000 Estimated Federal Grant
10,000,000 Appropriations
1.(3 pts) Record The adoption of the Capital Projects Fund budget.
FUND
Account Name
Debit
Credit
Capital Projects
Due from Other Governmental Units
2.(2 pts) Record the signing of the project contracts for all planned appropriations.
FUND
Account Name
Debit
Credit
3.(5 pts) The General Fund transfered $3,000,000 in cash to Capital Projects Fund. An advance on the Federal grant was received for the full estimated grant amount. Record the related journal entry(-ies).
FUND
Account Name
Debit
Credit
4.(6 pts) $5,100,000 was received in proceeds on the sale of the $5,000,000 Project Bond. The Debt Service Fund will manage the Bond Payments. Record the related journal entry(-ies).
FUND
Account Name
Debit
Credit
5.(7 pts) Final contracted construction and architect bills totaling $9,750,000 were approved and vouchered, less a 5% retention holdback on the construction bills, which will be paid when the project passes final detail inspection. Record the related journal entry(-ies).
FUND
Account Name
Debit
Credit
6.(3 pts) The new Health Center has passed its last detailed inspection and approval has been received to pay all remaining amounts owed the contractor (payables and retention). Record the journal entry for the payments.
FUND
Account Name
Debit
Credit
7.(5 pts) You transferred any unused bond proceeds to the Debt Service Fund and returned unused grant dollars to the Federal government. Record the related journal entry(-ies).
FUND
Account Name
Debit
Credit
B. (9 pts) Prepare closing entries for the Capital Projects Fund.
FUND
Account Name
Debit
Credit
C. (10 pts) Fill in the Financial Statement Blanks for the Capital Projects and Debt Service Funds.
Hometown
Capital Projects Fund – Health Center Construction
Statement of Revenues, Expenditures, and Changes in Fund Balance
For the Year Ended December 31, 2012
Revenues :
Federal Grant Revenue
Expenditures
Capital Outlay
Revenues Over (Under) Expenditures
Other Financing Sources (Uses)
Proceeds of Bonds
Premium on Bonds
Operating Transfers In – General Fund
Operating Transfers (Out) – Debt Service Fund
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance, January 1, 2012
Fund Balance, December 31, 2012
Hometown
Debt Service Fund – Health Center Construction Bonds
Statement of Revenues, Expenditures, and Changes in Fund Balance
For the Year Ended December 31, 2012
Revenues :
Federal Grant Revenue
Expenditures
Capital Outlay
Revenues Over (Under) Expenditures
Other Financing Sources (Uses)
Proceeds of Bonds
Premium on Bonds
Operating Transfers In – Capital Projects Fund
Net Change in Fund Balance
Fund Balance, January 1, 2012
Fund Balance, December 31, 2012
The remainder of this page is intentionally left blank for your use in compuations.
FUND
Account Name
Debit
Credit
Capital Projects
Due from Other Governmental Units
Explanation / Answer
FUND
Account Name
Debit
Credit
Capital Projects
General Fund A/c
$ 3000,0000
General Obligation Bond A/c
$ 5000,0000
Federal Grant A/c
$ 2000,000
Appropriations A/c
$ 10000,0000
2.(2 pts) Record the signing of the project contracts for all planned appropriations.
FUND
Account Name
Debit
Credit
Appropriation A/c
$ 10,000,000
Capital Project Fund A/c
$10,000,000
3.(5 pts) The General Fund transfered $3,000,000 in cash to Capital Projects Fund. An advance on the Federal grant was received for the full estimated grant amount. Record the related journal entry(-ies).
FUND
Account Name
Debit
Credit
Bank A/c Capital Project fund
$5,000,000
General Fund Transfer A/c
$3,000,000
Federal Grant Receipt A/c
$2,000,000
3.(5 4.(6 pts) $5,100,000 was received in proceeds on the sale of the $5,000,000 Project Bond. The Debt Service Fund will manage the Bond Payments. Record the related journal entry(-ies).
FUND
Account Name
Debit
Credit
Bank A/c Capital Project Fund
$ 5,100,000
Debt Service Fund A/c
$ 5,000,000
Premium of sale of Project Bond A/c
$ 1,00,000
5.(7 pts) Final contracted construction and architect bills totaling $9,750,000 were approved and vouchered, less a 5% retention holdback on the construction bills, which will be paid when the project passes final detail inspection. Record the related journal entry(-ies).
FUND
Account Name
Debit
Credit
Contractor bill for construction
$9750000
Bank A/c Capital Project Fund
$9262500
Bills payable Capital Project Fund
$487500
(3 pts) The new Health Center has passed its last detailed inspection and approval has been received to pay all remaining amounts owed the contractor (payables and retention). Record the journal entry for the payments.
FUND
Account Name
Debit
Credit
Bills payable Capital Project Fund
$ 487500
Bank A/c Project Fund a/c
$ 487500
6.(3 pts) The new Health Center has passed its last detailed inspection and approval has been received to pay all remaining amounts owed the contractor (payables and retention). Record the journal entry for the payments.
FUND
Account Name
Debit
Credit
Bills payable Capital Project fund A/c
$4,87500
Bank A/c Capital Project Fund
$ 4,87500
7.(5 pts) You transferred any unused bond proceeds to the Debt Service Fund and returned unused grant dollars to the Federal government. Record the related journal entry(-ies).
FUND
Account Name
Debit
Credit
Federal Grant a/c
$50,000
Debt Service Fund
$200,000
Bank A/c Capital Project Fund
$250,000
B. (9 pts) Prepare closing entries for the Capital Projects Fund.
FUND
Account Name
Debit
Credit
Bank A/c Capital Project A/c
$ 350000
Bank A/c Company A/c
$ 350000
FUND
Account Name
Debit
Credit
Capital Projects
General Fund A/c
$ 3000,0000
General Obligation Bond A/c
$ 5000,0000
Federal Grant A/c
$ 2000,000
Appropriations A/c
$ 10000,0000
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