Watson Township plans to build an auditorium. The plans were drawn by an architect who will complete the plans and bill the city for $115,000 after the bonds are issued. The township accepted a bid from Forrester Contractors for $9,200,000 for the entire project, which should take 2 years to build. It will not be started until October 1, 2021, so the projected completion date is September 30, 2023. The township's accounting supervisor plans to establish a Debt Service Fund to accumulate resources for repaying the bonds that will be issued to finance the project. These bonds will be serviced from property tax revenues and are expected to be issued at a face amount of $9,200,000. During 2021, $115,000 of investment revenue is expected to be available for construction purposes. The bonds will pay interest on April 1 and October 1 of each year, beginning in 2022. Prepare the journal entries needed to (1) record the budget and (2) the encumbrance in the appropriate funds for calendar year 2021, based on the preceding budgetary information. Account Debit Credit Capital Projects fund 1. Capital Projects fund > > >
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- Residents of the town of Sunny View, Arizona authorized a $5,000,000 renovation to theirhistoric town hall on November 15, 2022. Financing for the project consists of $2,500,000 froma 5 percent serial bond issue, $1,500,000 from a state grant, and $1,000,000 from the GeneralFund. Debt service for the serial bonds will be provided by a one-quarter-cent city sales taximposed on every dollar of sales in the city. Required: Complete the necessary journal entries to record the related transactions in the town's capitalprojects fund, debt service fund, and governmental activities at the government-wide level. Youmay ignore entries in the General Fund. The town has a calendar year-end. e. On April 1, 2023, the town issues serial bonds with a face value totaling $2,500,000 andhaving maturities ranging from one to 20 years at 102. The bonds bear interest of 5percent per annum, payable semiannually on April 1 and October 1. Premiums on bondsissued must be deposited directly in the debt service…Residents of the town of Sunny View, Arizona authorized a $5,000,000 renovation to theirhistoric town hall on November 15, 2022. Financing for the project consists of $2,500,000 froma 5 percent serial bond issue, $1,500,000 from a state grant, and $1,000,000 from the GeneralFund. Debt service for the serial bonds will be provided by a one-quarter-cent city sales taximposed on every dollar of sales in the city. Required: Complete the necessary journal entries to record the related transactions in the town's capitalprojects fund, debt service fund, and governmental activities at the government-wide level. Youmay ignore entries in the General Fund. The town has a calendar year-end. n. The sales tax collections for debt service amounted to $250,000. o. Central Paving and Construction gave a final billing to the town for $2,000,000. Upon last inspection by the Public Works Department, a leak was discovered in the roof.p. Public works employees installed a new sidewalk and landscaping at a…Residents of the town of Sunny View, Arizona authorized a $5,000,000 renovation to theirhistoric town hall on November 15, 2022. Financing for the project consists of $2,500,000 froma 5 percent serial bond issue, $1,500,000 from a state grant, and $1,000,000 from the GeneralFund. Debt service for the serial bonds will be provided by a one-quarter-cent city sales taximposed on every dollar of sales in the city. Required: Complete the necessary journal entries to record the related transactions in the town's capitalprojects fund, debt service fund, and governmental activities at the government-wide level. Youmay ignore entries in the General Fund. The town has a calendar year-end. a. Record the 2023 budget for the Serial Debt Service Fund. Sales taxes of $350,000 areexpected to be collected in 2023; the only appropriation is expected to be six months ofinterest of the serial bond.b. The town transfers $1,000,000 from the General Fund to a newly established capitalprojects fund.c.…
- Residents of the town of Sunny View, Arizona authorized a $5,000,000 renovation to theirhistoric town hall on November 15, 2022. Financing for the project consists of $2,500,000 froma 5 percent serial bond issue, $1,500,000 from a state grant, and $1,000,000 from the GeneralFund. Debt service for the serial bonds will be provided by a one-quarter-cent city sales taximposed on every dollar of sales in the city. Required: Complete the necessary journal entries to record the related transactions in the town's capitalprojects fund, debt service fund, and governmental activities at the government-wide level. Youmay ignore entries in the General Fund. The town has a calendar year-end. j. The town paid Central Paving and Construction the amount it had billed, except for 5percent that was withheld as a retained percentage per terms of the contract. k. Grant funds totaling $1,500,000 are received from the state historical society becauseeligible expenditures have been made. l. At year-end,…Residents from the Town of Mountain View authorized a $8,100,000 renovation to their historic town hall on November 15, 2022. Financing for the project consists of $3,200,000 from a 3 percent serial bond Issue, $2,600,000 from a state grant, and $2,300,000 from the General Fund. Debt service for the serial bonds will be provided by a one-quarter-cent city sales tax imposed on every dollar of sales in the city. You may Ignore entries in the General Fund. The town has a calendar year-end. Required Prepare Journal entries to record the related transactions in the town's capital projects fund, debt service fund, and governmental activities at the government-wide level. (Do not round Intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" In the first account field.) Transaction Fund/Governmental Activities General Journal Debit Credit a. Record the 2023 budget for the Serial Debt Service Fund. Sales taxes of $340,000 are expected to be…On January 1, 2020, the City of Hastings creates a solid waste landfill that it expects to reach capacity gradually over the next 20 years. If the landfill were to be closed at the current time, closure costs would be approximately $1.85 million plus an additional $790,000 for postclosure work. Of these totals, the city must pay $58,900 on December 31 of each year for preliminary closure work. At the end of 2020, the landfill reaches 6 percent of capacity. At the end of 2021, the landfill reaches 16 percent of capacity. At the end of 2021, a reassessment is made. Experts determine total closure costs will be $2.05 million rather than $1.85 million. a. Assume the city views the landfill as an enterprise fund. What journal entries should the city make in 2020 and 2021 in preparing government-wide financial statements? b. Assume the city views the landfill as being within the general fund. What journal entries should the city make in 2020 and 2021 in preparing government-wide financial…
- On June 1, 2020, the City of Cape May authorized the construction of a police station at an expected cost of $250,000. Financing will be provided through transfers from a Special Revenue Fund. The following transactions occurred during the fiscal year beginning June 1, 2020, relating to the Capital Project Fund. 1. The $250,000 receivable from the Special Revenue Fund was recorded. 2. The Special Revenue Fund transferred $125,000 to the Capital Project Fund to begin construction on the police station. 3. The Capital Project Fund invested the transfer of monies in a six-month certificate, at 5%. 4. A contract in the amount of $250,000 was let to the lowest bidder. 5. Architect and legal fees in the amount of $3,125 were approved for payment. There was no encumbrance for these expenditures. 6. Contract billings in the amount of $250,000 were approved for payment on the completion of the police station and the encumbrance was removed. 7. The six-month certificate was redeemed at maturity…A city government is considering two types oftown-dump sanitary systems. Design A requires aninitial outlay of $400,000 with annual operating andmaintenance costs of $50,000 for the next 15 years;design B calls for an investment of $300,000 withannual operating and maintenance costs of $80,000per year for the next 15 years. Fee collections fromthe residents would again be $85,000 per year. Theinterest rate is 8%, and no salvage value is associatedwith either system.(a) Using the benefit–cost ratio BC(i), which systemshould be selected?M16_PARK9091_06_GE_C16.indd 901 10/22/15 5:22 PM902 Chapter 16 Economic Analysis in the Service SectIf a new design (design C), which requires aninitial outlay of $350,000 and annual operatingand maintenance costs of $65,000, is proposed,would your answer in part (a) change?On January 1, 2020, the City of Hastings creates a solid waste landfill that it expects to reach capacity gradually over the next 20 years. If the landfill were to be closed at the current time, closure costs would be approximately $1.65 million plus an additional $900,000 for postclosure work. Of these totals, the city must pay $63,900 on December 31 of each year for preliminary closure work. At the end of 2020, the landfill reaches 4 percent of capacity. At the end of 2021, the landfill reaches 18 percent of capacity. At the end of 2021, a reassessment is made. Experts determine total closure costs will be $1.85 million rather than $1.65 million. a. Assume the city views the landfill as an enterprise fund. What journal entries should the city make in 2020 and 2021 in preparing government-wide financial statements? b. Assume the city views the landfill as being within the general fund. What journal entries should the city make in 2020 and 2021 in preparing government-wide financial…
- On January 1, 2020, the City of Hastings creates a solid waste landfill that it expects to reach capacity gradually over the next 20 years. If the landfill were to be closed at the current time, closure costs would be approximately $1.88 million plus an additional $750,000 for postclosure work. Of these totals, the city must pay $63,500 on December 31 of each year for preliminary closure work. At the end of 2020, the landfill reaches 3 percent of capacity. At the end of 2021, the landfill reaches 11 percent of capacity. At the end of 2021, a reassessment is made. Experts determine total closure costs will be $2.08 million rather than $1.88 million. Assume the city views the landfill as an enterprise fund. What journal entries should the city make in 2020 and 2021 in preparing government-wide financial statements? Assume the city views the landfill as being within the general fund. What journal entries should the city make in 2020 and 2021 in preparing government-wide financial…Voters of Valdez School District, a public school district, approved construction of a new high school at a cost not to exceed $20 million. The district will finance the construction by issuing $20 million of 6 percent term bonds payable in 20 years. Because the site had already been prepared, the school district began construction immediately but the bonds would not be issued for nearly a year. Shortly before the fiscal year-end, the school district borrowed $5 million from a local bank due in one year with interest at 6.2 percent. The note will be repaid from bond proceeds. The school district secured a financing agreement with the bank to convert the debt to a 10-year debt if the school district is unable to sell the bonds by the due date. At year-end, how should the $5 million note be displayed in the government-wide financial statements? A.) Notes payable-long term $5 million; B.) Notes payable-short term $5 million; C.) Nothing D.) None of aboveJournal entries and financial statements—Capital Projects FundThe following transactions occurred during 2021:1. The City of Watersville approved the construction of an enclosed concert arena for a total cost of $75,000,000 in order to attract professional events. On the same day, a contract with a 6 percent retainage clause was signed with V.P. Construction Company for the arena. The arena will be financed by a $75,000,000 general obligation bond issue. Investment revenue of $4,000,000 was also included in the budget. {Assume that the budget is recorded in the accounts and encumbrance accounting is used.)2. Watersville received $76,000,000 from the sale of bonds, which included a premium of $1,000,000 over the $75,000,000 face value. The $1,000,000 premium was transferred immediately to the appropriate Debt Service Fund.3. The city invested $74,900,000 in securities.4. The contract signed with V.P. stipulated that the contract price included the architect fees. The architects were…