Author Question: (Classification of financing sources in financial statements) Martin Township decides to ... (Read 228 times)

Pea0909berry · **on:** Jul 5, 2018

(Classification of financing sources in financial statements)

Martin Township decides to construct a new city hall.

Based on the following data, prepare a statement of revenues, expenditures, and changes in fund balance for Martin Township's Capital Projects Fund. All transactions occur within the calendar year 2013
a. The Fund starts and ends the year with a zero fund balance.
b. The Fund's financing sources for the city hall project were: long-term bond proceeds - 5 million; operating transfer from the General Fund - 2 million; state grant - 1 million; interest from the temporary investment of cash - 70,000.
c. Total outlays for constructing the new city hall were: construction costs - 7,200,000; design and construction supervision fees - 600,000.
d. City laws require that, whenever bonds are used, any remaining difference between total financing sources and construction costs must be transferred to the Debt Service Fund. Therefore, 270,000 was transferred to the Debt Service Fund.

Question 2

Beachside Coffee Shop, in an effort to streamline its accounting system, has decided to utilize a cash receiptsjournal in its operations. If the company records the cash sale of food for 18, which is the correct entry?
a. Cash Cr., 18; Food Revenue Dr., 18
b. Cash Dr., 18; Food Revenue Dr., 18
c. Cash Dr., 18; Food Revenue Cr., 18
d. Cash Cr., 18; Food Revenue Cr., 18

jgranad15 · **Reply #1 on:** Jul 5, 2018

Answer to Question 1

Martin Township
Capital Projects Fund
Statement of Revenues, Expenditures and Changes in Fund Balance
For the Year Ended December 31, 2013
Revenues
State grant 1,000,000
Investment income 70,000
Total revenues 1,070,000
Expenditures
Construction costs 7,200,000
Design and supervision fees 600,000
Total expenditures 7,800,000
Excess (deficiency) of revenues over expenditures (6,730,000)
Other financing sources (uses)
Long-term bonds issued 5,000,000
Transfer in from General Fund 2,000,000
Transfer out to Debt Service Fund (270,000)
Total other financing sources (uses) 6,730,000
Excess of revenues and other financing sources
over expenditures and other financing uses -0-
Fund balance, January 1, 2013 -0-
Fund balance, December 31, 2013 -0-

Answer to Question 2

c