a
Introduction: Capital project fund includes financial resources acquired for capital projects such as the construction of capital facilities, acquisition for the benefit of citizens, for example, construction of parks. This fund is created only at the time of construction or acquisition of the facility and closed once it is achieved.
The entries for all the funds involved and also the closing entries for capital project fund.
a
Explanation of Solution
Particulars | Debit $ | Credit $ |
CPE cash | 5,080,000 | |
Other financial sources − bond issue | 5,000,000 | |
Other financial sources − bond premium | 80,000 | |
(Issued bonds at premium for capital project fund) | ||
Other financing uses − transfer in capital project fund | 80,000 | |
Cash | 80,000 | |
(Premium transferred to other financing uses for debit service fund) | ||
Debit service fund Cash | 80,000 | |
Other financing sources − transfer in from capital project fund | 80,000 | |
(Premium in capital project transferred from debit service) | ||
Capital project fund expense | 45,000 | |
Voucher payable | 45,000 | |
(Expense on account of capital project recognized) | ||
Vouchers payable | 45,000 | |
Cash | 45,000 | |
(Paid cash for recognized vouchers) | ||
Capital project fund encumbrances | 4,500,000 | |
Budgetary fund balance − reserved for Encumbrances | 4,500,000 | |
(Encumbrances for capital project created) | ||
Capital project fund budgetary fund balance − reserved for Encumbrances | 2,000,000 | |
Encumbrances | 2,000,000 | |
(Encumbrances reversed at the time of designated expenditure) | ||
Expenditure | 2,000,000 | |
Contracts payable | 1,800,000 | |
Contract payable − Retained percentage | 200,000 | |
(Designated expenditure recognized) | ||
Capital project fund contracts payable | 1,800,000 | |
Cash | 1,800,000 | |
(Cash paid on contracts payable) | ||
Closing entries on capital project fund: | ||
Other financing sources − bond issue | 5,000,000 | |
Other financing sources − bond premium | 80,000 | |
Expenditures | 2,045,000 | |
Other financing uses − transfer out to debt service fund | 80,000 | |
Fund balance − unreserved | 2,955,000 | |
(Closing entry passed and transferring balance to fund balance unreserved) | ||
Budgetary fund balance − reserved for encumbrances | 2,500,000 | |
Encumbrances | 2,500,000 | |
(Outstanding encumbrances at the end transferred to reserve fund account) | ||
Fund balance − unreserved | 2,500,000 | |
Fund balance − reserved for encumbrances | 2,500,000 | |
(Outstanding encumbrances balance transferred to fund balance unreserved at the end of the year) |
b
Introduction: Capital project fund includes financial resources acquired for capital projects such as the construction of capital facilities, acquisition for the benefit of citizens, for example, construction of parks. This fund is created only at the time of construction or acquisition of the facility and closed once it is achieved.
The
b
Answer to Problem 18.15P
Net assets as per capital project fund balance sheet $3,155,000.
Explanation of Solution
W City
Capital Project Fund Balance Sheet
December 31, 20X2
$ | $ | |
Assets: | ||
Cash | 3,155,000 | |
Total assets | 3,155,000 | |
Liabilities and fund balance: | ||
Contracts payable − retained percentage | 200,000 | |
Fund balance: | ||
Reserved for encumbrances | 2,500,000 | |
Unreserved | 455,000 | 2,955,000 |
Total liabilities and fund balance | 3,155,000 |
c
Introduction: Capital project fund includes financial resources acquired for capital projects such as the construction of capital facilities, acquisition for the benefit of citizens, for example, construction of parks. This fund is created only at the time of construction or acquisition of the facility and closed once it is achieved.
The preparation of Statement of revenues, expenses and changes in fund net position for 20X3
c
Answer to Problem 18.15P
Fund balance as on June 30 20X3 $2,955,000.
Explanation of Solution
W City
Statement of Revenue, Expenses and
Change in Fund Net Assets
December 31, 20X2
$ | $ | |
Expenditure: | ||
Capital Outlays: | ||
Building removal | 45,000 | |
Building constriction | 2,000,000 | |
Total expenditures | 2,045,000 | |
Deficiency of revenue over expenditures | (2,045,000) | |
Proceeds of serial bonds | 5,080,000 | |
Transfer out to debt service fund | (80,000) | |
Total other financing sources (uses) | 5,000,000 | |
Net change in fund balance | 2,955,000 | |
Fund balance July 1 20X2 | 0 | |
Fund balance June 30 20X3 | 2,955,000 |
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Chapter 18 Solutions
Advanced Financial Accounting
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