Exercise 5-2

 

A concerned citizen provides resources and establishes a trust with the local government. What factors should be considered in determining which fund to report the trust activities?

 

Exercise 5-4

 

The citizen of Spencer County approved the issuance of $ 2,000,000 in 6% general obligation bonds to finance the construction of a courthouse annex. A capital project fund was established for that purpose. The preclosing trial balance of the courthouse annex capital project fund follows:

Trial Balance-December 31, 2015

Debits                      Credits

Cash                                                               $900,000

Contract payable                                                                             $550,000

Due from State Government                           200,000

Encumbrances                                                85,000

Expenditures-Capital                                      1,850,000

Intergovernmental grant                                                                        400,000

OFS: premium on bonds                                                                   45,000

OFS: proceeds sale of bonds                                                         2,000,000

Budgetary fund balance-

Reserve for encumbrances                                                        85,000

Transfer out                                                      45,000

$3,080,000              $3,080,000

 

REQUIRED:

a. Prepare any closing entries necessary at year-end.

b. Prepare a Statement of Revenues, Expenditure, and Changes in Fund Balance for the courthouse annex capital project fund.

c. Prepare a balance sheet for the Courthouse Annex Capital Project Fund, assuming all unexpended resources are restricted to construction of the courthouse annex.