Reference no: EM131748487
1. On June 1, 2015, the City of Cape May authorized the construction of a police station at an expected cost of $250,000. Financing will be provided through transfers from a Special Revenue Fund. The following transactions occurred during the fiscal year beginning June 1, 2015, relating to the Capital Project Fund.
1. The $250,000 receivable from the Special Revenue Fund was recorded.
2. The Special Revenue Fund transferred $125,000 to the Capital Project Fund to begin construction on the police station.
3. The Capital Project Fund invested the transfer of monies in a six-month certificate, at 5%.
4. A contract in the amount of $250,000 was let to the lowest bidder.
5. Architect and legal fees in the amount of $3,125 were approved for payment. There was no encumbrance for these expenditures.
6. Contract billings in the amount of $250,000 were approved for payment on the completion of the police station and the encumbrance was removed.
7. The six-month certificate was redeemed at maturity with interest revenue.
8. The Special Revenue Fund transferred the final amount of $125,000 to the Capital Projects Fund.
9. All liabilities except for the retention of 5% of the contract price were paid.
10. All requirements and obligations were completed; the final payment of the contract price was made and all nominal accounts were closed.
Required:
Prepare the journal entries necessary in the Capital Projects Fund to record the transactions and events described above.
2. On January 1, 2015, Metropolis City issued a 7%, 5-year, $100,000 general obligation bond for $96,007. The bond pays interest annually (on December 31) and was issued to yield 8%. The bond was issued in the capital projects fund, and the proceeds are to be used to build a giant ball that will drop twenty stories on New Year's Eve. No construction has occurred. A debt service fund was created to meet the interest and principal payments. The city prepares financial statements on December 31 of each year.
Required:
Determine how the above information will be reflected on each of the following statements for the year 2015.
1. The governmental funds' statement of revenue, expenditures, and changes in fund balances. List the governmental fund and then list the dollar amount within the appropriate heading on the statement (such as Revenues, Expenditures, or Other Financing Sources (Uses)).
2. The government-wide statement of net position.
3. The government-wide statement of activities.