UESTION 2 Match each of the following transactions of a capital projects fund es

Question

UESTION 2 Match each of the following transactions of a capital projects fund established for the construction of a new fire station to the section of the statement of revenue, expenditures, and changes in fund balance where it would be presented. C Received s980,000 in state grant funds for the construction of the new A. Expenditures fire station. B. Revenues a transfer from the General Fund of $500,000 as a contribution for the new fire station. Other financing sources (uses) Paid out $350,000 to the general contractor for the Arst progress billing. on the construction of the new fire station. D Is not reported on the statement of revenue, expenditures, and changes in E. Special and extraordinary items fund balance C Recelved $4,800,000 from the proceeds of a general obligation bond issued to construct the new fire station, Repaid $100,000 in principal on the general obligation bonds Paid $20,000 in interest on the general obligation bonds Received $500,000 from a revenue anticipation note issued to the local bank to meet cash needs, to be repaid with the issuance of a general oblication bond. s from the temporary invenstment of general obligation bond proceeds.

Explanation / Answer

Transactions

Head

1. Received $ 980,000 in state grant ………….….new fire station.

B. Revenues

Reason: Grants, received by a capital projects fund from any governmental unit is considered as revenue of the capital projects fund.

2. Received a transfer from General Fund of $ 500, 00…………..….for the new fire station.

c. Other financing sources (uses)

Reason: Revenues raised by the General Fund for capital projects fund is reported under Other financing sources (uses).

3. Paid out $ 350,000 to general contractor………………… of the new fire station.

A. Expenditures

Reason: As it is cost incurred in the construction of new fire station.

4. Received $ 4,800,000 from proceeds …………….to construct the new fire station.

c. Other financing sources (uses)

Reason: Proceeds from issue of long term debt are considered under Other financing sources (uses).

5. Repaid $ 1, 00,000 in principal…………………………bonds.

D.It is not reported on the statement of revenue, expenditures, and changes in fund balance.

Reason: Repayment or redemption activities of long term debt do not reported in transactions of capital project fund.

6. Paid $ 20,000 in interest…………………………………………bonds.

A. Expenditures

Reason: As it is cost incurred in the construction of new fire station.

7. Received $ 5, 00,000 from revenue…………………obligation bond.

B. Revenues

Reason:

Interest earned on temporary investments of capital projects fund is reported as revenue for capital project fund.

8. Received $ 8,000 interest earnings……………….bond proceeds.

B. Revenues

Reason: Interest earned on temporary investments

Of capital projects fund is reported as revenue for capital project fund.

Transactions

Head

1. Received $ 980,000 in state grant ………….….new fire station.

B. Revenues

Reason: Grants, received by a capital projects fund from any governmental unit is considered as revenue of the capital projects fund.

2. Received a transfer from General Fund of $ 500, 00…………..….for the new fire station.

c. Other financing sources (uses)

Reason: Revenues raised by the General Fund for capital projects fund is reported under Other financing sources (uses).

3. Paid out $ 350,000 to general contractor………………… of the new fire station.

A. Expenditures

Reason: As it is cost incurred in the construction of new fire station.

4. Received $ 4,800,000 from proceeds …………….to construct the new fire station.

c. Other financing sources (uses)

Reason: Proceeds from issue of long term debt are considered under Other financing sources (uses).

5. Repaid $ 1, 00,000 in principal…………………………bonds.

D.It is not reported on the statement of revenue, expenditures, and changes in fund balance.

Reason: Repayment or redemption activities of long term debt do not reported in transactions of capital project fund.

6. Paid $ 20,000 in interest…………………………………………bonds.

A. Expenditures

Reason: As it is cost incurred in the construction of new fire station.

7. Received $ 5, 00,000 from revenue…………………obligation bond.

B. Revenues

Reason:

Interest earned on temporary investments of capital projects fund is reported as revenue for capital project fund.

8. Received $ 8,000 interest earnings……………….bond proceeds.

B. Revenues

Reason: Interest earned on temporary investments

Of capital projects fund is reported as revenue for capital project fund.

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