Question

Can i get help with these– for the city of smithville 17thedition ch 5?

Even a couple hints or a couple journal entries would behelpful–just having a hard time figuring it out on my own andthere are not a ton of resources for this type of accounting.

Chapter 5 Recording Capital AssetTransactions

Street Improvement Capital Projects Fund andGovernmental Activities at the Government-wide Level

During late 2016, the voters of the City of Smithvilleauthorized tax-supported bond issues totaling $8,000,000 as partialfinancing for a series of projects to construct streets, curbs,culverts, and storm sewers in various parts of the city. Theestimated total cost of the series of projects, which are expectedto extend over the next three years, was $10,200,000. In additionto the bond financing, voters also approved a special ½ cent salestax to assist in financing the projects. The sales tax beginsJanuary 1, 2017 and will continue for five years. The sales tax isprojected to generate $500,000 each year.

Required

a. Prepare general journal entries as necessaryto record the transactions described below in the StreetImprovement Fund general journal and, if applicable, in thegovernmental activities general journal. Do not record entries atthis time in other affected funds; those entries will be made inthe later chapters of this cumulative problem that cover theaffected funds. Use account titles listed under the drop down[Account (# – Description)] menu. Be sure the year2017 is selected from the drop-down[Year] menu and the appropriate paragraph numbershown in bold-face font below is in the [TransactionDescription] box.

Before closing the City of Smithville, click on[File], and [Save/Save As] to save your work. If you closethe file by clicking on the [X] box you will beasked if you want to save your changes before closing.

1.[Para. 5-a-1] In early 2017, design plans andspecifications for the first project, the Elm Street Project, weresubmitted by a construction engineering firm. The firm billed theStreet Improvement Fund for $125,000.

Required: Record this billing and the relatedVouchers Payable liability in the Street Improvement Fund andgovernmental activities journals. (Note: this transaction was notencumbered.)

2.   [Para. 5-a-2] On March 1,2017, the city signed a $40,000, 90-day tax anticipation notebearing interest of 2.5 percent per annum.

Required: Record this transaction in the StreetImprovement Fund and governmental activities journals.

3.   [Para. 5-a-3] A $335purchase order for advertisements soliciting bids for the ElmStreet Project was issued during April 2017. The bill foradvertising in the amount of $330 was received and a voucher forpayment was issued.

Required: Record the encumbrance, billing, andthe Vouchers Payable liability in the Street Improvement Fund andgovernmental activities journals, as appropriate.

4.   [Para. 5-a-4] On April 15,2017, construction bids were opened and analyzed. A bid of$2,100,000 was accepted, and the contract was awarded for the ElmStreet Project. The contract provided for a retained percentage of5 percent from each progress payment, and from the final payment,until final inspection and acceptance by the city’s public worksinspectors.

Required: Record the signing of the contract inthe Street Improvement Fund general journal. This transaction hasno effect at the government-wide level.

5.   [Para. 5-a-5] Sales taxrevenue of $190,000 was received.

Required: Record this transaction in both theStreet Improvement Fund and governmental activities generaljournals.

[Para. 5-a-6] Vouchers payable accumulated todate were paid in April 20, 2017.

Required: Record this transaction in both theStreet Improvement Fund and governmental activities generaljournals.

[Para. 5-a-7] On May 6, 2017, 4% deferredserial bonds with a face value of $2,000,000 were sold for a totalamount of $2,070,000, of which $28,000 was for accrued interestfrom the January 1, 2017 date of the bonds and $42,000 was apremium on the bonds sold. Cash in the amount of the accruedinterest and premium was deposited directly in the StreetImprovement Bond Debt Service Fund. Cash in the amount of$2,000,000 was deposited and recorded in the Street ImprovementFund.

Required: Record these transactions in theStreet Improvement Fund and governmental activities journals.(Hint: In addition to recording the liability for bonds payable inthe governmental activities journal, you should record the premiumon the bonds payable [credit Premium on Deferred Serial Bonds] andaccrued interest on bonds sold [we recommend that you creditExpense—Interest on Long-term Debt] in the governmental activitiesgeneral journal for the $28,000 of accrued interest.) For now youshould not make the entries in the Street Improvement Bond DebtService Fund to record the accrued interest and premium. Thoseentries will be made in Chapter 6 of this cumulative problem.

[Para. 5-a-8] The city repaid the $40,000 taxanticipation note plus interest of $250 ($40,000 X .025 X 90/360)(See transaction 2).

Required: Record this transaction in both theStreet Improvement Fund and governmental activities generaljournals. The $250 of interest should be debited to InterestExpenditures in the Street Improvement Fund journal and toExpenses—General Government in the governmental activitiesjournal.

[Para. 5-a-9] In July 2017, the contractor forthe Elm Street Project reported that the project was one-halfcompleted and requested a progress payment of $1,050,000. Thisamount was paid in late July, less the contractual retention of 5percent.

Required: Record this transaction in both theStreet Improvement Fund and governmental activities generaljournals.

10.[Para. 5-a-10] Construction engineersengaged by the city submitted design plans and specifications forthe second street improvement project, the “Spruce Street Project.”Vouchers were approved in the amount of $90,000 in payment for theengineering services.

Required: Record this transaction in both theStreet Improvement Fund and governmental activities journals.(Note: This transaction was not encumbered.)

11.[Para. 5-a-11] In late November 2017 the ElmStreet project was completed and the contractor for the projectrequested a final payment of $1,070,000. This amount was recordedas a liability. Payment was made, less the retained percentage, onDecember 1, 2017.

Required: Record this transaction in both theStreet Improvement Fund and governmental activities journals.

12.[Para. 5-a-12] Additional sales taxes werecollected in the amount of $320,000 on December 15, 2017.

Required: Record this transaction in both theStreet Improvement Fund and governmental activities journals.

13.[Para. 5-a-13] Outstanding vouchers forengineering services were paid.

Required: Record this transaction in both theStreet Improvement Fund and governmental activities journals.

14.[Para. 5-a-14] The city engineer approvedthe final construction on the Elm Street Project, and the city paidthe retained percentage (Transactions 9 and 11) to thecontractor.

Required: Record this transaction in both theStreet Improvement Fund and governmental activities journals. Totalconstruction costs for the Elm Street Project should be capitalizedin the Infrastructure account in governmental activities.

15. Verify the accuracy of all your preceding entries in theStreet Improvement Fund and governmental activities generaljournals, then click [Post Entries] of each entityto post the entries to the respective general ledgers. For theStreet Improvement Fund only, prepare year-end closing entries for2017 and post them to the fund’s general ledger, FundBalance—Restricted. (Note: You must click on the box for[Closing Entry] to check mark it; “Closing Entry”will appear in the [Transaction Description] boxfor the account being closed. Be sure the check mark is present foreach account being closed.) Click [Post Entries]to post the closing entry. Under current GASB standardsencumbrances and encumbrances outstanding are not reported in anyfinancial statements. Consequently, there is no need to close theseaccounts since the Spruce Street Project is still underway atyear-end. Closing entries will be made in the governmentalactivities general journal in Chapter 9 of this cumulative problem.Ignore those entries for now.

 



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *