Reference no: EM132015798

Question -

Read the following transactions and then complete the required documents thereafter.

In 2014, Kirkland began work on an outdoor amphitheater and concession stand at the city's park. It is to be financed by a $3,500,000 bond issue and supplemented by a $500,000 General Fund transfer.

The following transactions occurred in 2014:

1. The General Fund transferred $500,000 to the Park Building Capital Projects Fund.

2. A contract was signed with Rapid Construction Company for the major part of the project on a bid of $2,700,000.

3. Preliminary planning and engineering costs of $69,000 were vouchered for the Great Pacific Engineering Company. (This cost had not been encumbered.)

4. A payable was recorded for an $18,500 billing from the Water and Sewer enterprise fund for the cost of extending water pipes to the new concession stand.

5. An invoice in the amount of $1,000,000 was received from Rapid for progress to date on the project.

6. The $3,500,000 bonds were issued at par.

7. The amount billed by the contractor (see Transaction 5) less 5 percent retainage was paid.

8. Temporary investments were purchased at a cost of $1,800,000.

9. Closing entries were prepared as of December 31, 2014. Assume that $2,500,000 of the encumbrances outstanding will be paid from the bond proceeds and are therefore considered restricted resources.

After reviewing the list of transactions complete the required items below:

a. Prepare journal entries to record the preceding information in the general ledger accounts for the Park Building Capital Projects Fund. (You may ignore the entries that would also be required in the governmental activities general journal at the government-wide level.)

b. Prepare a balance sheet for the Park Building Capital Projects Fund as of December 31, 2014.

c. Prepare a statement of revenues, expenditures, and changes in fund balances for the period.