Question

Comprehensive Problem #1:
In Erikus County, the Parks & Recreation Department constructed a library in one of the county’s high growth areas. The construction was funded by a number of sources. Below is selected information related to the Library Capital Project Fund. All activity related to the library construction occurred within the 2014 fiscal year.
a.The county issued $6,000,000, 5% bonds, with interest payable semi-annually on June 30 and December 31. The bonds sold for 102 on July 30, 2013. Proceeds from the bonds were to be used for construction of the library, with all interest and premiums received to be used to service the debt issue.
b. A $690,000 federal grant was received to help finance construction of the library.
c. The Library Special Revenue Fund transferred $300,000 for use in construction of the library.
d. A construction contract was awarded in the amount of $6,800,000.
e. The library was completed on June 1, 2014, four months ahead of schedule. Total construction expenditures for the library amounted to $6,900,000. When the project was completed, the cost of the library was allocated as follows:
- Land – $200,000
- Building – $6,295,000
- Equipment – remainder
f. The Capital Projects Fund temporary accounts were closed to Fund Balance – Restricted. The resources are restricted because they were obtained from bonded debt issued exclusively for library construction. The Capital Projects Fund was closed by transferring remaining funds to the Debt Service Fund for use in library construction debt repayment.
REQUIRED: Make all necessary entries in the Capital Projects Fund general journal.

Comprehensive Problem #2
As of December 31, 2013, Sandy Beach had $1,000,000 in 5% serial bonds outstanding. Cash of $502,000 is the debt service fund’s only asset as of December 31, 2013, and there are no liabilities. The serial bonds pay interest semiannually on January 1 and July 1, with $500,000 in bonds being retired on each interest payment date. Resources for payment of interest are transferred from the General Fund, and the debt service fund levies property taxes in an amount sufficient to cover principal payments.
a. Prepare debt service fund entries in general journal form to reflect, as necessary, the following information and transactions for FY 2014.
1. The operating budget for FY 2014 consists of estimated revenues of $1,040,000 and estimated other financing sources equal to the amount of interest to be paid in FY 2014. Appropriations must be provided for interest payments and bond redemptions on January 1 and July 1.
2. Cash was received from the General Fund and checks were written and mailed for the January 1 principal and interest payments.
3. Property taxes in the amount of $1,010,000 were levied (no estimate for uncollectible accounts has been made.)
4. Property taxes in the amount of $1,008,000 were collected.
5. Cash was received from the General Fund and checks were written and mailed for the July1 principal and interest payments.
6. Uncollected taxes receivable were reclassified as delinquent.
b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balances for the Debt Service Fund for the year ended December 31, 2014.
c. Prepare a Balance Sheet for the Debt Service Fund as of December 31, 2014.

Comprehensive Problem #3
The Town of Elizabeth operates the old train station as an enterprise fund. The train station is on the national register of historic buildings. Since the town has held the building for such a long time, the Central Station Fund has no long-term debt. The only capital assets recorded by the Central Station Fund are machinery & equipment. Businesses rent space in the building and the town provides all services related to the operation and maintenance of the building. Following is information related to the fund’s 2014 operating activities:
a. Rental income of $120,000 was accrued. Subsequently, cash in the amount of $90,000 was received on accounts.
b. Cash expenses for the period included:
- Administrative Services – $30,000
- Maintenance & Repairs – $40,000
- Supplies & Materials – $5,000
- Utilities – $35,000
c. The Central Station Fund did not receive any funds from the General Fund.
d. Adjustments were made for depreciation ($3,000) and for uncollectible accounts ($1,200)

1. Prepare general journal entries to record the Central Station Fund’s operating activities for the year.
2. Prepare a Statement of Revenues, Expenses, and Changes in Fund Net Position. The net position balance at the beginning of the period was $64,333.
3. Should this activity be recognized as an enterprise fund (or as part of the general fund)?
a. Yes, the fund has sufficient cash on hand to pay the bills.
b. No, the fund does not have sufficient cash to pay the bills.
c. Yes, the fund is operating at a profit.
d. No, the fund is operating at a loss.
4. Did the Central Station collect sufficient rent to cover the funds expenses?
a. Yes
b. No
5. If the Fund did not collect sufficient cash from the tenants in the current period to pay its expenses, then how did the fund pay its bills?
a. A transfer from the general fund
b. A loan from the bank.
c. Beginning net asset balance (e.g. cash in bank)
d. None of the above (i.e. The fund had collected sufficient cash from the tenants during the year to pay its expenses.)

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