Trust Activities and Fund Issues

Exercise 5-2

A concerned citizen provides resources and establishes a trust with the local government. What factors should be considered in determining which fund to report the trust activities?

Exercise 5-4

The citizen of Spencer County approved the issuance of $ 2,000,000 in 6% general obligation bonds to finance the construction of a courthouse annex. A capital project fund was established for that purpose. The preclosing trial balance of the courthouse annex capital project fund follows: 


Trial Balance-December 31, 2015 

                                                                         Debits                      Credits 

Cash                                                               $900,000 
Contract payable                                                                             $550,000 
Due from State Government                           200,000 
Encumbrances                                                85,000 
Expenditures-Capital                                      1,850,000 

Intergovernmental grant                                                                        400,000 
OFS: premium on bonds                                                                   45,000
OFS: proceeds sale of bonds                                                         2,000,000
Budgetary fund balance-                                                              
     Reserve for encumbrances                                                        85,000 
Transfer out                                                      45,000

                                                                      $3,080,000              $3,080,000

REQUIRED:

a. Prepare any closing entries necessary at year-end. 
b. Prepare a Statement of Revenues, Expenditure, and Changes in Fund Balance for the courthouse annex capital project fund.
c. Prepare a balance sheet for the Courthouse Annex Capital Project Fund, assuming all unexpended resources are restricted to construction of the courthouse annex.