Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the debt service fund
5-7);The Village of Harris issued $5,000,000 in 6 percent general obligation, taxsupported;bonds on July 1, 2011, at 101. A fiscal agent is not used. Resources;for principal and interest payments are to come from the General Fund. Interest;payment dates are December 31 and June 30. The first of 20 annual principal;payments is to be made June 30, 2012. Harris has a calendar fiscal year.;1. A capital projects fund transferred the premium ($50,000) to the debt service;fund.;2. On December 31, 2011, funds in the amount of $150,000 were received;from the General Fund and the first interest payment was made.;3. The books were closed for 2011.;4. On June 30, 2012, funds in the amount of $350,000 were received from;the General Fund, and the second interest payment ($150,000) was made;along with the first principal payment ($250,000).;5. On December 31, 2012, funds in the amount of $142,500 were received from;the General Fund and the third interest payment was made ($142,500).;6. The books were closed for 2012.;a. Prepare journal entries to record the events above in the debt service;fund.;b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund;Balance for the debt service fund for the year ended December 31;2011.;c. Prepare a Statement of Revenues, Expenditures, and Changes in Fund;Balance for the debt service fund for the year ended December 31;2012;5?10.) On July 1, 2011, a five-year agreement is signed between the City of Genoa;and the Computer Leasing Corporation for the use of computer equipment;not associated with proprietary funds activity. The cost of the lease, excluding;executory costs, is $12,000 per year. The first payment is to be made by a;capital projects fund at the inception of the lease. Subsequent payments, beginning;July 1, 2012, are to be made by a debt service fund. The present value;of the lease payments, including the first payment, is $54,552. The interest;rate implicit in the lease is 5 percent.;a. Assuming the agreement meets the criteria for a capital lease under the provisions;of SFAS No. 13, make the entries required in (1) the capital projects;fund and (2) the debt service fund on July 1, 2011, and July 1, 2012.;b. Comment on where the fixed asset and long-term liability associated with;this capital lease would be recorded and the impact of the journal entries;recorded for a.;6?3. Why might it be desirable to operate enterprise funds at a profit?;6?10. The Town of Frostbite self-insures for some of its liability claims and purchases;insurance for others. In an effort to consolidate its risk management;activities, the Town recently decided to establish an internal service fund, the;Risk Management Fund. The Risk Management Fund?s purpose is to obtain;liability coverage for the Town, to pay claims not covered by the insurance;and to charge individual departments in amounts sufficient to cover currentyear;costs and to establish a reserve for losses.;The Town reports proprietary fund expenses by object classification using;the following accounts: Personnel services (salaries), Contractual services;(for the expired portion of prepaid service contracts), Depreciation, and Insurance Claims. The following transactions relate to the year ended December;31, 2012, the first year of the Risk Management Fund?s operations.;1. The Risk Management Fund is established through a transfer of;$500,000 from the General Fund and a long-term advance from the;water utility enterprise fund of $250,000.;2. The Risk Management Fund purchased (prepaid) insurance coverage;through several commercial insurance companies for $200,000. The policies;purchased require the Town to self-insure for $25,000 per incident.;3. Office Equipment is purchased for $10,000.;4. $450,000 is invested in marketable securities.;5. Actuarial estimates were made in the previous fiscal year to determine;the amount necessary to attain the goal of accumulating sufficient funds;to cover current-year claims and to establish a reserve for losses. It was;determined that the General Fund and water utility be assessed a fee of;6 percent of total wages and salaries (Interfund premium). Wages and;salaries by department are as follows;Public Safety 5,000,000;General Administrative Operations 1,500,000;Education 1,500,000;Water Utility 2,500,000;Total 10,500,000;7?6. On July 1, 2011, the City of Belvedere accepted a gift of cash in the amount;of $3,000,000 from a number of individuals and foundations and signed an;agreement to establish a private-purpose trust. The $3,000,000 and any additional;gifts are to be invested and retained as principal. Income from the trust;is to be distributed to community nonprofit groups as directed by a Board;consisting of city officials and other community leaders. The agreement provides;that any increases in the market value of the principal investments are;to be held in trust, if the investments fall below the gift amounts, then earnings;are to be withheld until the principal amount is reestablished.;a. The following events and transactions occurred during the fiscal year ended;June 30, 2012. Record them in the Belvedere Community Trust Fund.;(1) On July 1, the original gift of cash was received.;(2) On July 1, $2,000,000 in XYZ Company bonds were purchased at;par plus accrued interest. The bonds pay an annual rate of 6 percent;interest semiannually on April 1 and October 1.;(3) On July 2, $950,000 in ABC Company common stock was purchased.;ABC normally declares and pays dividends semiannually, on January;31 and July 31.;(4) On October 1, the first semiannual interest payment was received;from XYZ Company. Note that part of this is for accrued interest due;at the time of purchase, the remaining part is an addition that may be;used for distribution.;(5) On January 31, a cash dividend was received from ABC Company in;the amount of $38,000.;(6) On March 1, the ABC stock was sold for $960,000. On the same day;DEF Company stock was purchased for $965,000.;(7) On April 1, the second semiannual interest payment was received;from XYZ Company.;(8) During the month of June, distributions were approved by the Board;and paid in cash in the amount of $104,000.;(9) Administrative expenses were recorded and paid in the amount of;$7,500.;(10) An accrual for interest on the XYZ bonds was made as of June 30;2012.;(11) As of June 30, 2012, the fair value of the XYZ bonds, exclusive of;accrued interest, was determined to be $2,002,000. The fair value of;the DEF stock was determined to be $960,000.;(12) Closing entries were prepared.
Paper#24575 | Written in 18-Jul-2015Price : $37