MULTI-FUND PROBLEM
You are a Hometown accountant. The Capital Project Fund has just been created to account for resources received and expended for the construction of a new Health Center. Funding for the Health Center is being provided by a $5,000,000 General Obligation Bond sale, a direct transfer from the General Fund, and a Federal Grant. The grant terms provide that the Federal Government will pay only up to 20% of all project expenditures incurred; unused funds must be returned at the completion of the project.
Required Elements :
A) Journalize the requested transactions for the
a. Capital Project Fund
b. Debt Service Fund
c. General Fund
B) Prepare closing entries for the Capital Projects Fund.
C) Provide the missing values for the Capital Projects and Debt Service Funds' financial statements.
Hometown's Council has adopted the following project budget.
$ 3,000,000 General Fund Operating Transfer
5,000,000 General Obligation Bonds
2,000,000 Estimated Federal Grant
10,000,000 Appropriations
1. Record The adoption of the Capital Projects Fund budget.
FUND Account Name Debit Credit
2. Record the signing of the project contracts for all planned appropriations.
FUND Account Name Debit Credit
3. The General Fund transfered $3,000,000 in cash to Capital Projects Fund. An advance on the Federal grant was received for the full estimated grant amount. Record the related journal entry(-ies).
FUND Account Name Debit Credit
4. $5,100,000 was received in proceeds on the sale of the $5,000,000 Project Bond. The Debt Service Fund will manage the Bond Payments. Record the related journal entry(-ies).
FUND Account Name Debit Credit
5. Final contracted construction and architect bills totaling $9,750,000 were approved and vouchered, less a 5% retention holdback on the construction bills, which will be paid when the project passes final detail inspection. Record the related journal entry(-ies).
FUND Account Name Debit Credit
6. The new Health Center has passed its last detailed inspection and approval has been received to pay all remaining amounts owed the contractor (payables and retention). Record the journal entry for the payments.
FUND Account Name Debit Credit
7. You transferred any unused bond proceeds to the Debt Service Fund and returned unused grant dollars to the Federal government. Record the related journal entry(-ies).
FUND Account Name Debit Credit
B.Prepare closing entries for the Capital Projects Fund.
FUND Account Name Debit Credit
C. Fill in the Financial Statement Blanks for the Capital Projects and Debt Service Funds.
Hometown
Capital Projects Fund - Health Center Construction
Statement of Revenues, Expenditures, and Changes in Fund Balance
For the Year Ended December 31, 2012
Revenues :
Federal Grant Revenue
Expenditures
Capital Outlay
Revenues Over (Under) Expenditures
Other Financing Sources (Uses)
Proceeds of Bonds
Premium on Bonds
Operating Transfers In - General Fund
Operating Transfers (Out) - Debt Service Fund
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance, January 1, 2012
Fund Balance, December 31, 2012
Hometown
Debt Service Fund - Health Center Construction Bonds
Statement of Revenues, Expenditures, and Changes in Fund Balance
For the Year Ended December 31, 2012
Revenues :
Federal Grant Revenue
Expenditures
Capital Outlay
Revenues Over (Under) Expenditures
Other Financing Sources (Uses)
Proceeds of Bonds
Premium on Bonds
Operating Transfers In - Capital Projects Fund
Net Change in Fund Balance
Fund Balance, January 1, 2012
Fund Balance, December 31, 2012
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