Schedule of Capital Sssets and Depreciation by fea57361

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									CHAPTER 5:            ACCOUNTING FOR GENERAL CAPITAL ASSETS AND
                      CAPITAL PROJECTS
5-2.   1.   c.         6.   b.
       2.   b.         7.   c.
       3.   b.         8.   a.
       4.   c          9.   c.
       5.   d.        10.   b.


5-3.                                                                 Debits              Credits
1.     Governmental Activities:
       BUILDINGS                                                 7,620,000
       CONSTRUCTION WORK IN PROGRESS                                                   5,240,000
         CASH                                                                          2,380,000
       Capital Projects Fund:
       CASH                                                      2,380,000
         OFS-PROCEEDS OF BONDS                                                         1,800,000
         REVENUES – FEDERAL GRANT                                  580,000

       CONSTRUCTION EXPENDITURES                                 2,380,000
          CASH                                                                         2,380,000
2.     Governmental Activities:
       CASH                                                        100,000
          LAND                                                                           50,000
         INTERNAL TRANSFER IN                                                            50,000
       General Fund:
       CASH                                                        100,000
         OFS-INTERFUND TRANSFER IN                                  50,000
         OFS-Proceeds from Transfer of Capital Asset                          50,000

Note: The required entry in the Enterprise Fund was not requested for this problem. If it had
been required that entry would have reflected a debit to Land for only $50,000 as GASB
Standards preclude establishing a new cost basis for a capital asset transferred within the
government. Thus, the Enterprise Fund also would debited OFU-Interfund Transfer Out for
$50,000, representing a net transfer of $50,000 of its Unrestricted Net Assets. In the Business-
Type Activities column of the government-wide statement of net assets, the $50,000 transfer out
would be reported in parentheses on a line title “Transfers,” to identify it as a transfer out from
that column. The $50,000 would be reported on the same line without parentheses in the
Governmental Activities column.




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                                                                 Debits    Credits
3.   Governmental Activities:
     EQUIPMENT—COMPUTER                                           2,500
     ACCUMULATED DEPRECIATION                                     1,000
        EQUIPMENT—COMPUTER                                                   1,000
        CASH                                                                 2,200
        GAIN ON TRADE OF EQUIPMENT                                             300

     Special Revenue Fund:
      EXPENDITURES                                                2,200
          CASH                                                               2,200

4.   Governmental Activities:
     EQUIPMENT                                                 247,500
        CASH                                                               247,500

     LIST PRICE                       $250,000
     LESS: 1% FOR PROMPT
     PAYMENT                             2 ,500
     NET COST OF EQUIPMENT             $247,500

     Special Revenue Fund:
     EXPENDITURES                                              247,500
        CASH                                                               247,500

5.
                                                                 Debits    Credits
     Governmental Activities:
     BUILDINGS                                                 574,300
     EXPENSES- PUBLIC WORKS                                     49,400
       CASH                                                                623,700

     BUILDINGS (new)                                              84,600
        BUILDINGS (old)*                                                    84,600
     * Note: only if there is a subsidiary detail worth updating.

     General Fund:
     EXPENDITURES                                              623,700
        CASH                                                               623,700
     Note: No entry required in the Capital Projects Fund.




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     6. Governmental Activities:
        IMPROVEMENTS OTHER THAN
          BUILDINGS                                                     3,150,000
        LAND                                                              200,000
          PROGRAM REVENUES – CAPITAL
            GRANTS AND CONTRIBUTIONS –
            PUBLIC WORKS                                                                       3,350,000

 (Note: The Program Revenues in this case would ultimately be closed to Net Assets – Invested in
 Capital Assets, Net of Related Debt. GASB standards require that all changes in net assets must
 flow through the operating statement.)

 5-4.
                               TOWN OF CENTRALIA
               CAPITAL ASSET DISCLOSURES – GOVERNMENTAL ACTIVITIES
                          FISCAL YEAR ENDED APRIL 30, 2005

                                Beginning            Additions               Retirements          Ending
                                 Balance                                                          Balance
                                                  (1,5,6)                   (7)
Land                             $1,326,780              $1,140,000            $( 12,000)         $2,454,780
                                                           (5)              (7,8)
Buildings                         7,282,680                   301,600           (113,600)          7,470,680
                                                          (2)               (8)
Improvements                      3,027,790                   799,066           (119,200)          3,707,656
                                                        (3,4)                 (8)
Equipment                         1,733,820                   568,700             (19,300)         2,283,220
                                                                            (2)
Construction work in                                                            (401,130)
                                                            (1)
  progress                           401,130                      680,000                            680,000
Infrastructure                     3,500,000                                                       3,500,000
Total, at historical cost         17,272,200                 3,489,366            (665,230)       20,096,336
Less: Accumulated
       depreciation
Buildings                         (1,439,200)                 (440,000)               51,000      (1,828,200)
Improvements                        (928,400)                 (320,000)             102,000       (1,146,400)
Equipment                           (837,500)                 (210,000)                5,000      (1,042,500)
Infrastructure                      (900,000)                 (105,000)             _______       (1,005,000)
Total accumulated                 (4,105,100)               (1,075,000)              158,000      (5,022,100)
   depreciation
Governmental activities         $13,167,100                 $2,414,366         $(507,230)        $15,074,236
capital assets, net

 Notes:
 A schedule showing how depreciation expense was charged to governmental functions is
 required, but not shown in this problem.

 Superscripts refer to the transaction numbers in the problem.




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5-7. a.                             TOWN OF LOVELL
                     RECREATION CENTER CONSTRUCTION FUND
                                  GENERAL JOURNAL
Recreation Center Construction Fund:                Debits Credits
1A. CONSTRUCTION EXPENDITURES                      55,000
         VOUCHERS PAYABLE                                          55,000
Governmental Activities:
1B. CONSTRUCTION WORK IN PROGRESS                  55,000
         VOUCHERS PAYABLE                                          55,000

Recreation Center Construction Fund:
2A. ENCUMBRANCES                                     30,000
         RESERVE FOR ENCUMBRANCES                                      30,000
Governmental Activities:
NO ENTRY REQUIRED

Recreation Center Construction Fund:
3.    ENCUMBRANCES                                 2,500,000
         RESERVE FOR ENCUMBRANCES                                2,500,000
Governmental Activities:
NO ENTRY REQUIRED

Recreation Center Construction Fund:
4A. RESERVE FOR ENCUMBRANCES                         30,000
      CONSTRUCTION EXPENDITURES                      30,500
         ENCUMBRANCES                                                  30,000
         VOUCHERS PAYABLE                                              30,500
Governmental Activities:
4B. CONSTRUCTION WORK IN PROGRESS                    30,500
         VOUCHERS PAYABLE                                              30,500

Ch. 5, Solutions, 5-7 (Cont’d)

Recreation Center Construction Fund:                  Debits Credits
5A. CONSTRUCTION EXPENDITURES                        40,000
         DUE TO WATER UTILITY FUND                                     40,000

Governmental Activities:
5B. CONSTRUCTION WORK IN PROGRESS                    40,000
        INTERNAL BALANCES                                              40,000




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Recreation Center Construction Fund:
6A. RESERVE FOR ENCUMBRANCES                          1,600,000
      CONSTRUCTION EXPENDITURES                       1,600,000
         ENCUMBRANCES                                                1,600,000
         CONTRACTS PAYABLE                                           1,600,000

Governmental Activities:
6B. CONSTRUCTION WORK IN PROGRESS                     1,600,000
        CONTRACTS PAYABLE                                            1,600,000

Recreation Center Construction Fund:
7A. CASH                                              3,000,000
         OFS-PROCEEDS OF BONDS                                       3,000,000

Governmental Activities:
7B. CASH                                              3,030,000
        BONDS PAYABLE                                                3,000,000
        ACCRUED INTEREST PAYABLE                                        30,000

Recreation Center Construction Fund:                    Debits        Credits
 8A. DUE TO WATER UTILITY FUND                          40,000
         CASH                                                           40,000
Governmental Activities:
8B. INTERNAL BALANCES                                    40,000
         CASH                                                           40,000

Recreation Center Construction Fund:
9A. CONTRACTS PAYABLE                                 1,600,000
         CONTRACTS PAYABLE--RETAINED
           PERCENTAGE                                                   64,000
         VOUCHERS PAYABLE                                            1,536,000
Governmental Activities:
9B. SAME AS 9A

Recreation Center Construction Fund:
10A. VOUCHERS PAYABLE                                1,620,200
         CASH                                                        1,620,200
      (COMPUTATION: $55,000 + $30,500 + $1,536,000 - $1,300 = $1,620,200)
Governmental Activities:
10B. SAME AS 10A

Recreation Center Construction Fund:
11A. INVESTMENTS                                      1,300,000
         CASH                                                        1,300,000
Governmental Activities:
11B. SAME AS 11A



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Recreation Center Construction Fund:                        Debits       Credits
12A. PROCEEDS OF BONDS                                    3,000,000
         CONSTRUCTION EXPENDITURES                                      1,725,500
         ENCUMBRANCES                                                     900,000
         FUND BALANCE                                                     374,500


Governmental Activities:

NO CLOSING ENTRY REQUIRED AS THERE ARE NO TEMPORARY ACCOUNT
BALANCES. IF SUFFICIENT INFORMATION HAD BEEN GIVEN, IT WOULD HAVE
BEEN APPROPRIATE TO ACCRUE ADDITIONAL INFORMATION ON THE BONDS
PAYABLE. BUT SINCE NO SUCH INFORMATION IS PROVIDED, THAT ENTRY IS
IGNORED.


                               TOWN OF LOVELL
                     RECREATION CENTER CONSTRUCTION FUND
                        GENERAL LEDGER (NOT REQUIRED)

                  CASH                                  CONTRACTS PAYABLE
(7)       3,000,000         (8)    40,000         (9) 1,600,000         (6) 1,600,000
                           (10) 1,620,200
                           (11) 1,300,000

              INVESTMENTS                                  VOUCHERS PAYABLE
(11)      1,300,000                               (10) 1,620,200        (1)    55,000
                                                                        (4)    30,500
                                                                        (9) 1,536,000

                                                        CONTRACTS PAYABLE⎯
       DUE TO WATER UTILITY FUND                       RETAINED PERCENTAGE
(8)    40,000            (5)  40,000                                   (9) 64,000

         FUND BALANCE                                         ENCUMBRANCES
                            (12)   374,500        (2)    30,000          (4)    30,000
                                                  (3) 2,500,000          (6) 1,600,000
                                                                         (12) 900,000
                                                   RESERVE FOR ENCUMBRANCES
                                                  (4)    30,000           (2) 30,000
                                                  (6) 1,600,000          (3) 2,500,000
       CONSTRUCTION EXPENDITURES
(1)          55,000    (12) 1,725,500
(4)          30,500
(5)          40,000
(6)       1,600,000



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b.                           TOWN OF LOVELL
                   RECREATION CENTER CONSTRUCTION FUND
                              BALANCE SHEET
                             DECEMBER 31, 2005

                                        ASSETS
CASH                                                                             $   39,800
INVESTMENTS                                                                       1,300,000
 TOTAL ASSETS                                                $1,339,800

                          LIABILITIES AND FUND EQUITY
LIABILITIES:
 VOUCHERS PAYABLE                                                                $    1,300
 CONTRACTS PAYABLE⎯ RETAINED PERCENTAGE                                              64,000
  TOTAL LIABILITIES                                                                  65,300

FUND EQUITY:
 RESERVE FOR ENCUMBRANCES                                                           900,000
 FUND BALANCE                                                                       374,500
  TOTAL FUND EQUITY                                                               1,274,500
  TOTAL LIABILITIES AND FUND EQUITY                                              $1,339,800



c.                         TOWN OF LOVELL
                RECREATION CENTER CONSTRUCTION FUND
          STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
                           IN FUND BALANCE
                FOR THE PERIOD ENDED DECEMBER 31, 2005

EXPENDITURES:
 CONSTRUCTION EXPENDITURES                                                $ 1,725,500
EXCESS OF REVENUES OVER (UNDER) EXPENDITURES                               (1,725,500)
OTHER FINANCING SOURCES:
 PROCEEDS OF BONDS                                                          3,000,000
EXCESS OF REVENUES AND OTHER
 FINANCING SOURCES OVER EXPENDITURES                                       1,274,500
INCREASE IN ENCUMBRANCES DURING 2005                                         900,000
INCREASE IN FUND BALANCE DURING 2005                                         374,500
FUND BALANCE, JANUARY 1, 2005                                                     -0-
FUND BALANCE, DECEMBER 31, 2005                                           $ 374,500

d.   In the governmental activities column of the Statement of Net Assets, the Construction
     Expenditures of $1,150,500 for this year will appear in the Capital Assets, net of
     depreciation row. The capital assets disclosure in the notes to the financial statements



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will break this total down by class, such as Construction Work in Progress (in this case) if
the project is not yet complete, or specific amounts for Buildings, Equipment and Land
Improvement. The governmental activities column of the Statement of Activities will
show the depreciation expense on the Recreation Center when it is completed, most likely
in the functional expense category (row) called Parks and Recreation.




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