Multiple-Project Fund Transactions. During FY 2017, the voters of Surprise County approved construction of a $21 million police facility and an $11 million fire station to accommodate the county’s population growth. The construction will be financed by tax-supported bonds in the amount of $30 million, a $1 million economic stimulus grant, and a portion of future use tax revenues. During 2017, the following events and transactions occurred:
- Issued $120,000 of 6 percent bond anticipation notes to cover preliminary planning and engineering expenses.
- Incurred architecture and engineering costs in the amount of $60,000. They were split evenly between the two projects.
- Entered into a construction contract for $32 million–$21 million was for the police facility and $11 million was related to the fire station.
- Issued the $30 million, 20-year 5% bonds at 101. (The premium should be recorded in a debt service fund. You do not need to record this entry.)
- Paid off the bond anticipation notes that had been outstanding 180 days. (Interest is an expenditure of the capital projects fund.)
- An invoice for $16 million was received from the contractor for a portion of police facility construction ($10 million) and fire station construction ($6 million).
- Half of the grant funds were received in cash. The remainder is anticipated in 2018; however, the grantor notified the county that there is no guarantee that the federal government will appropriate the 2018 portion.
- The initial construction invoice, less 5% retainage, was paid.
- The fire station was completed, and a final invoice for the remaining $5 million was received. All fire station construction charges incurred can be capitalized as buildings.
- Following inspection, the fire station invoices were paid in full.
- At year-end, the contractor billed the county an additional $7.5 million for the police facility; however, the police facility was incomplete.
- Temporary accounts were closed at year-end. Assume that the fund balances are all restricted.
Using this information
- Prepare journal entries to record the preceding information in a single Surprise County Construction Fund and the governmental activities general journal at the government-wide level.
- Prepare a Surprise County Construction Fund balance sheet for the year ended December 31, 2017.
- Prepare a Construction Fund statement of revenues, expenditures, and changes in fund balances for the year ended December 31, 2017.
- How would these capital expenditures for the police facility and fire station appear on the Surprise County’s government-wide statements of net position and activities?