Prepare the journal entries for the events below for the capital projects funds.
ID: 2455731 • Letter: P
Question
Prepare the journal entries for the events below for the capital projects funds.
The state government established a capital project fund in 2014 to build new highways. The fund is supported by a 5% tax on diesel fuel in the state. The tax is collected by private gas stations and remitted in the following month to the State.
Capital Project Fund Trial Balance:
12/31/2014
Cash $9,700,000
Taxes receivable 2,750,000
Contracts payable 1,850,000
Fund Balance 10,600,000
Journal Entry #4: During the year, contractors submitted invoices for payment totaling 30,700,000. These were under the terms of contracts (i.e. the same $ amounts) issued by the State.
Explanation / Answer
Fund Balance A/c DR 30,700,000 $
To Contracts Payable A/c 30,700,000 $