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.

Question

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Answer 1

Question

Chapter 18, Problem 18.15P

a

To determine

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

Expert Solution

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

To determine

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 balance sheet of capital project fund at June 30 20X3

b

Expert Solution

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

To determine

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

Expert Solution

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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Students have asked these similar questions

Construction and debt transactions can affect more than one fund. During 2021 Luling Township engaged in the following transactions related to modernizing the bridge over the Luling River. The township accounts for long-term construction projects in a capital projects fund.• On July 1 it issued 10-year, 4 percent bonds with a face value of $1 million. The bonds were sold for $1,016,510, an amount that provides an annual yield of 3.8 percent (semiannual rate of 1.9 percent). The city incurred $10,000 in issue costs.• On August 1, it was awarded a state reimbursement grant of $800,000. During the year it incurred allowable costs of $600,000. Of these it paid $500,000 in cash to various contractors. It received $450,000 from the state, expecting to receive, early in 2022, the $150,000 difference between allowable costs incurred and cash received. Moreover, it expects to receive the balance of the grant later in 2022. • It invested the bond proceeds in short-term federal securities. During…

The citizens of Spencer County approve the issuance of $2,000,000 in 6 percent genneral obligtions bonds to finance the contruction of a courthouse annex. A capital projects fund was established for that pupose. The precolisning trial balance of the courthouse annex capital project fund follows: Debits: Cash $400,000; due from state government $75,000; Encumbrances $120,000; Expenditures - Capitals $2,160,000; OFU: Transfer Out $25,000 Credit: Contract Payable $250,000; Intergivernmental Grant $385,000; OFS: Premium on bonds $25,00; OFS: proceeds sale of Bonds $2,000,000; Budgetary fund Balamce- Reserve for encumbrance $120,000 Required: a. Prepare any closing entries neccessary at year end. b. Prepare a statement of Revenue, Expenditures, and Changes in Fund Balance for the courthouse annex capital fund project. c. Prepare a Balance Sheet for the courthouse annex capital project fund, assuming all unexpendedresources are restricted to construction of the courthouse annex.

The citizens of Spencer County approved the issuance of $2,008,000 in 6 percent general obligation bonds to finance the construction of a courthouse annex. A capital projects fund was established for that purpose. The preclosing trial balance of the courthouse annex capital project fund follows: Trial Balance—December 31, 2020 Debits Credits Cash $ 908,000 Contract payable $ 551,000 Due from state government 192,000 Encumbrances 108,000 Expenditures—capital 1,854,000 Intergovernmental grant 395,000 OFS: premium on bonds 57,000 OFS: proceeds sale of bonds 2,008,000 Budgetary fund balance—Reserve for encumbrances 108,000 OFU: Transfer out 57,000 $ 3,119,000 $ 3,119,000 Required:a. Prepare any closing entries necessary at year-end.b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance…

Answer 2

Question

Chapter 18, Problem 18.15P

a

To determine

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

Expert Solution

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

To determine

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 balance sheet of capital project fund at June 30 20X3

b

Expert Solution

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

To determine

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

Expert Solution

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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Answer 3

Question

Chapter 18, Problem 18.15P

a

To determine

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

Expert Solution

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

To determine

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 balance sheet of capital project fund at June 30 20X3

b

Expert Solution

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

To determine

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

Expert Solution

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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Answer 4

Question

Chapter 18, Problem 18.15P

a

To determine

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

Expert Solution

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

To determine

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 balance sheet of capital project fund at June 30 20X3

b

Expert Solution

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

To determine

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

Expert Solution

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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Answer 5

Chapter 18, Problem 18.15P

a

To determine

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

Expert Solution

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

To determine

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 balance sheet of capital project fund at June 30 20X3

b

Expert Solution

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

To determine

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

Expert Solution

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

Answer 6

Chapter 18, Problem 18.15P

a

To determine

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

Expert Solution

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)

Answer 7

Chapter 18, Problem 18.15P

a

To determine

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.

Answer 8

a

Expert Solution

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)

Answer 9

a

Expert Solution

Answer 10

a

Expert Solution

Answer 11

Expert Solution

Answer 12

b

To determine

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 balance sheet of capital project fund at June 30 20X3

b

Expert Solution

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

Answer 13

b

To determine

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 balance sheet of capital project fund at June 30 20X3

Answer 14

b

Expert Solution

Answer to Problem 18.15P

Net assets as per capital project fund balance sheet $3,155,000.

Answer 15

b

Expert Solution

Answer 16

b

Expert Solution

Answer 17

Expert Solution

Answer 18

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

Answer 19

c

To determine

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

Expert Solution

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

Answer 20

c

To determine

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

Answer 21

c

Expert Solution

Answer to Problem 18.15P

Fund balance as on June 30 20X3 $2,955,000.

Answer 22

c

Expert Solution

Answer 23

c

Expert Solution

Answer 24

Expert Solution

Answer 25

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