Acct 410 transaction HW

E9-4 (GCA/GLTL Entries) Prepare the journal entries required in the General Capital Assets and General Long-Term Liabilities accounts of Percy County to record the following transactions. Indicate whether any gains and losses are to be reported in the government-wide financial statements.

1. Land was donated for use as the site of a bike and nature trail. The donor had acquired the land for $3,000 about 20 years earlier. Its estimated fair value when donated to the county was $40,000.

2. Computer equipment was ordered for General Fund departments. The estimated cost was $48,000.

3. The computer equipment was received by the county. The actual cost was $47,750. The county had paid $42,000 to the vendor by year end.

4. The county sold a (general government) dump truck that had cost $55,000. Accumulated depreciation on the truck was $50,000. The county sold the truck at auction for $3,300.

5. A storage building used by general government departments was destroyed by a tornado. The building, which cost $150,000, is expected to be rebuilt at a cost of $200,000. The building was 50% depreciated when destroyed. Construction has not begun on the new building.

6. The government leased a building under a capital lease agreement. The capitalizable cost was $1,200,000. The county made an initial down payment of $100,000.

E10-2 (Net Position Components) Using the format at the end of this exercise, indicate the impact that each of the following transactions has on the total net position of a proprietary fund and on each net position component. Also, indicate whether the transaction is reported in the statement of revenues, expenses, and changes in fund net position of a proprietary fund. A sample transaction is analyzed for you.

Sample Transaction: Purchase of equipment costing $5,000 with unrestricted cash.

1. Sold building with a book value of $150,000 for $225,000 (proceeds not restricted).

2. Land costing $500,000 was purchased by issuing a five-year, 8% note payable for $450,000. The balance was paid from cash restricted for an expansion project.

3. Depreciation expense for the year was $200,000.

4. Interest expense of $36,000 on the note in transaction 2 was paid from unrestricted resources.

5. Bonds payable of $200,000 were repaid from restricted resources, along with $50,000 of interest. The bonds were issued several years earlier to finance capital asset construction.

6. A capital grant of $500,000 was received, but no qualifying costs have been incurred.

7. $300,000 of the restricted capital grant from transaction 6 was expended for its intended purpose.

8. Sales revenues amounted to $1,000,000.

9. Interest revenues restricted to the use of the Enterprise Fund, $40,000, were received.

10. The cost of materials and supplies used for the year was $75,000.

 

 

Net Position

Transaction Number

Affect Operating Statement?

Unrestricted

Restricted

Net Investment in Capital Assets

Total

Sample

No

$(5,000)

—

+$5,000

—

E10-3 (Refunding) Prepare the journal entries needed in an Enterprise Fund to record the following transactions. Include any adjusting entries required.

1. Issued refunding bonds at par, $8,000,000. The bonds bear interest at 8% payable annually and mature in 5 years. (Ignore bond issue costs.)

2. Paid the $8,000,000 into an irrevocable trust to defease in substance the previously outstanding bonds payable of the Enterprise Fund. These old bonds have a par value of $7,200,000 and an unamortized discount of $100,000. The old bonds are scheduled to mature in six years.

3. The annual interest payment on the new bonds was made at year end when due.

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