(Classification of Financing Sources in Financial Statements)

question 9

Essay

(Classification of financing sources in financial statements)
Martin Township decides to construct a new city hall.Based on the following data,prepare a statement of revenues,expenditures,and changes in fund balance for Martin Township's Capital Projects Fund.All transactions occur within the calendar year 2013.
a.The Fund starts and ends the year with a zero fund balance.
b.The Fund's financing sources for the city hall project were: long-term bond proceeds - $5 million;operating transfer from the General Fund - $2 million;state grant - $1 million;interest from the temporary investment of cash - $70,000.
c.Total outlays for constructing the new city hall were: construction costs - $7,200,000;design and construction supervision fees - $600,000.
d.City laws require that,whenever bonds are used,any remaining difference between total financing sources and construction costs must be transferred to the Debt Service Fund.Therefore,$270,000 was transferred to the Debt Service Fund.

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Definitions:

Acute

Describes something that is severe and sudden in onset, such as an acute illness, which contrasts with chronic conditions that develop gradually and persist over a long period of time.

Chronic

Describing a condition or disease persisting for a long time or constantly recurring, often referring to health issues.

Affect

A term used in psychology to describe the experience of feeling or emotion.

Ambivalence

The state of having mixed feelings or contradictory ideas about something or someone.