CHAPTER 5 Practice Problem 5-10

CHAPTER 5 Practice Problem 5-10 - CHAPTER 5 ACCOUNTING FOR...

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CHAPTER 5: ACCOUNTING FOR GENERAL CAPITAL ASSETS AND CAPITAL PROJECTS Ch. 5, Solutions 5-10.  a .  FALTS CITY STREET IMPROVEMENT FUND Debits Credits 1.  CASH     100,000 OTHER FINANCING SOURCES—PROCEEDS OF BOND ANTICIPATION NOTES 100,000 2.  DUE FROM FEDERAL GOVERNMENT     750,000 REVENUES 750,000 Note: the $750,000 to be received the following year is a time requirement and would not be accrued. 3.  ENCUMBRANCES 2,700,000 RESERVE FOR ENCUMBRANCES 2,700,000 4.  CONSTRUCTION EXPENDITURES   60,000 DUE TO OTHER FUNDS 60,000 5.  CONSTRUCTION EXPENDITURES    69,000 CASH 69,000 6.  CONSTRUCTION EXPENDITURES 18,500 VOUCHERS PAYABLE 18,500
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7.  RESERVE FOR ENCUMBRANCES 1,000,000 CONSTRUCTION EXPENDITURES 1,000,000 ENCUMBRANCES 1,000,000  CONTRACTS PAYABLE 1,000,000
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Ch. 5, Solutions, 5-10 (Cont’d) Debits Credits 8.  CASH 3,250,000 DUE FROM FEDERAL GOVERNMENT 750,000 OTHER FINANCING SOURCES— PROCEEDS OF BONDS 2,500,000 9.  OTHER FINANCING USES—REPAYMENT OF BANs 100,000      INTEREST EXPENDITURES (NOTE A) 3,000  CASH   103,000 (BANs = BOND ANTICIPATION NOTES)  NOTE A:  Interest due is calculated as follows: $100,000 x .06 x 180/360 = $3,000; interest is not capitalized for general capital assets.    10.  CONTRACTS PAYABLE 1,000,000   CONTRACTS PAYABLE—RETAINED PERCENTAGE     50,000   CASH    950,000 11.  INVESTMENTS 1,800,000   CASH 1,800,000
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Ch. 5, Solutions, 5-10 (Cont’d) Debits Credits 12. OTHER FINANCING SOURCES—          PROCEEDS OF BONDS 2,500,000 OTHER FINANCING SOURCES— PROCEEDS OF BANs 100,000       REVENUES    750,000        FUND BALANCE     399,500   ENCUMBRANCES 1,700,000   OTHER FINANCING USES—REPAYMENT OF BANs 100,000   CONSTRUCTION EXPENDITURES 1,147,500   INTEREST EXPENDITURES 3,000
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Ch. 5, Solutions, 5-10 (Cont’d) FALTS CITY STREET IMPROVEMENT FUND GENERAL LEDGER (NOT REQUIRED)                                                             CASH  
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