Question

This year Riverside began work on an outdoor amphitheater and concession stand at the city’s park. It is to be financed by a $3,900,000 bond issue and supplemented by a $540,000 General Fund transfer. The following transactions occurred during the current year:

1. The General Fund transferred $540,000 to the Park Building Capital Projects Fund.
2. A contract was signed with Restin Construction Company for the major part of the project on a bid of $3,100,000.
3. Preliminary planning and engineering costs of $73,000 were vouchered for the Great Pacific Engineering Company. (This cost had not been encumbered.)
4. A payable was recorded for an $20,500 billing from the Water and Sewer enterprise fund for the cost of extending water pipes to the new concession stand.
5. An invoice in the amount of $1,200,000 was received from Restin for progress to date on the project.
6. The $3,900,000 bonds were issued at par.
7. The amount billed by the contractor (see Transaction 5) less 5 percent retained was paid.
8. Temporary investments were purchased at a cost of $1,840,000.
9. Closing entries were prepared as of year-end. Assume that $2,700,000 of the encumbrances outstanding will be paid from the bond proceeds and are therefore considered restricted resources. The remaining fund balance is assigned.

Required

1. Prepare journal entries to record the preceding information for the Park Building Capital Projects Fund. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

2. Prepare a balance sheet for the Park Building Capital Projects Fund as of year-end.

3. Prepare a statement of revenues, expenditures, and changes in fund balances for the period.

Answer 1

	Account	debit	credit
1	cash	540,000
	other financing sources - interfund transfers in		540,000
2	Encumbrances	3,100,000
	Encumbrances outstanding		3,100,000
3	Construction expenditures	73,000
	Vouchers payable		73,000
4	Construction expenditures	20,500
	Due to other funds		20,500
5	Encumbrances outstanding	1,200,000
	Construction expenditures	1,200,000
	Encumbrances		1,200,000
	contracts payable		1,200,000
6	cash	3,900,000
	other financing sources - proceeds of bonds		3,900,000
7	contracts payable	1,200,000
	contracts payable -retained earnings		60,000
	cash		1,140,000
8	Investments	1,840,000
	cash		1,840,000
9	other financing sources - interfund transfers in	540,000
	other financing sources - proceeds of bonds	3,900,000
	Fund balance - restricted		2,700,000
	Fund balance - assigned		446,500
	Construction expenditures		1,293,500

Balance sheet
Assets
cash		1,460,000
Investments		1,840,000
Total assets		3,300,000
Liabilities and fund balances
Liabilities:
Contracts Payable—Retained Percentage		60,000
Due to Other Funds		20,500
Vouchers Payable		73,000
Total Liabilities		153,500
Fund Balances:
Fund Balance—Restricted	2,700,000
Fund Balance—Assigned	446,500
Total Fund Balances		3,146,500
Total Liabilities and Fund Balances		3,300,000

Statement Of Revenues, Expenditures, and Changes in Fund Balances
Expenditures:
Construction Expenditures		1,293,500
Other Financing Sources and Uses:
Interfund Transfers In	540,000
Proceeds of Bonds Sold	3,900,000
		4,440,000
Excess of Revenues and Other Sources Over Expenditures		3,146,500
Fund Balances, January 1		0
Fund Balances, December 31		3,146,500