Chapter 05 – Accounting for General Capital Assets and Capital Projects
5–16
Ch. 5, Solutions, 5-20 (Cont’d)
General Problem Information: Asset Impairment
Learning Objective: 5-2
Topic: Asset Impairments and Insurance Recoveries
Bloom’s Taxonomy: Analyze
Accreditation Skills tag: AACSB: Knowledge Application, AICPA: FN Reporting
Level of Difficulty: Medium
5-21. FULBRIGHT COUNTY
Debits Credits
1. Capital Projects Fund:
Governmental Activities:
(Note: This assumes the premium and interest are recorded directly in the
debt service fund. If the premium and interest were first recorded in the
capital projects fund, the capital projects fund would also credit Due to
Debt Service Fund for $80,000.)
2. Capital Projects Fund:
Chapter 05 – Accounting for General Capital Assets and Capital Projects
5–17
Chapter 5, Solutions, 5-21, part 2 (Cont’d)
Debits Credits
Governmental Activities:
3. Capital Projects Fund:
Governmental Activities:
NO ENTRY WHEN TRANSFERS ARE BETWEEN GOVERNMENTAL
FUNDS
(Note: There would also be an entry in the special revenue fund.)
4. Capital Projects Fund:
Governmental Activities:
BUDGETARY TRANSACTIONS ARE NOT RECORDED IN THE
GOVERNMENTAL ACTIVITIES JOURNAL
5. Capital Projects Fund:
Chapter 05 – Accounting for General Capital Assets and Capital Projects
5–18
Chapter 5, Solutions, 5-21, part 5 (Cont’d)
Debits Credits
CONSTRUCTION EXPENDITURES 6,890,000
CASH 6,890,000
6. Capital Projects Fund:
To close nominal accounts:
OTHER FINANCING SOURCES—
PROCEEDS OF BONDS 6,000,000
Chapter 05 – Accounting for General Capital Assets and Capital Projects
5–19
Chapter 5, Solutions, 5-21 part 6 (Cont’d)
Governmental Activities:
NO ENTRY SINCE THE CLOSING ONLY RELATES TO THE FUND
General Problem Information: Capital Projects Fund
Learning Objective: 5-4
Topic: Capital Projects Funds
Bloom’s Taxonomy: Apply
Accreditation Skills tag: AACSB: Knowledge Application; AICPA: FN Reporting
Level of Difficulty: Medium
5-22. a. CHANCE COUNTY
WOODLAND PARK CAPITAL PROJECTS FUND
STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2017
REVENUES $ 707,000
EXPENDITURES:
b. It would appear that the capital project has not been completed since
Chapter 05 – Accounting for General Capital Assets and Capital Projects
5–20
Chapter 5, Solutions, 5-22 (Cont’d)
General Problem Information: Statement of Revenues and Expenditures
Learning Objective: 5-5
Topic: Capital Projects Funds
Bloom’s Taxonomy: Apply
Accreditation Skills tag: AACSB: Knowledge Application; AICPA: FN Reporting
Level of Difficulty: Medium
5-23. a. SURPRISE COUNTY
Debits Credits
1. Construction Fund:
CASH 100,000
2. Construction Fund:
CONSTRUCTION EXPENDITURES—POLICE 30,000
Chapter 05 – Accounting for General Capital Assets and Capital Projects
5–21
Chapter 5, Solutions, 5-23, part a. 3. (Cont’d)
Debits Credits
3. Construction Fund:
ENCUMBRANCES—POLICE 21,000,000
4. Construction Fund:
CASH 30,000,000
5. Construction Fund:
Chapter 05 – Accounting for General Capital Assets and Capital Projects
5–22
Chapter 5, Solutions, 5-23, part a. 5. (Cont’d)
Debits Credits
Governmental Activities:
6. Construction Fund:
ENCUMBRANCES OUTSTANDING—POLICE 10,000,000
ENCUMBRANCES OUTSTANDING—FIRE 6,000,000
ENCUMBRANCES—POLICE 10,000,000
ENCUMBRANCES—FIRE 6,000,000
7. Construction Fund:
Governmental Activities:
Chapter 05 – Accounting for General Capital Assets and Capital Projects
5–23
Chapter 5, Solutions, 5-23, part a. (Cont’d)
Debits Credits
8. Construction Fund and Governmental Activities:
9. Construction Fund:
ENCUMBRANCES OUTSTANDING—FIRE 5,000,000
ENCUMBRANCES—FIRE 5,000,000
10. Construction Fund and Governmental Activities:
CONTRACTS PAYABLE 5,000,000
11. Construction Fund:
Chapter 05 – Accounting for General Capital Assets and Capital Projects
5–24
Chapter 5, Solutions, 5-23, part a. 11. (Cont’d)
Debits Credits
12. Construction Fund:
OTHER FINANCING SOURCES—PROCEEDS
OF BOND ANTICIPATION NOTES 100,000
OTHER FINANCING SOURCES—PROCEEDS
OF BOND 30,000,000
REVENUES 500,000
Governmental Activities:
NO CLOSING ENTRY REQUIRED AS THERE ARE NO TEMPORARY
ACCOUNT BALANCES.