Prepare entries to record the following transactions related to the construction

Question

Prepare entries to record the following transactions related to the construction of a new justice center Gail) by Mud Flats County. accounting. Make all required entries for the Capital Projects Fund only The County adopts a formal budget and uses encumbrance A. The County adopts a capital budget at the beginning of the year. To finance construc tion, y will transfer $6 million from its General Fund and apply for a federal grant of tion of the building and $500,000 for S6 million. It appropriates $11.5 million for construct furniture and equipment. Record the budget. B. The General Fund transfers $3 million to the Capital Projects Fund. C. The federal government approves the $6 million construction grant and sends a check to the County. Record this revenue. D. The County invests $7,500,000 in investments. E. The County awards a construction contract in the amount of $10 million and encumbers the funds. A 10% retainer has been agreed upon by both parties. F. The contractor sends a progress billing to the County in the amount of $4.8 million. The bill is approved by the engineers and a voucher is prepared. G. Investments totaling $4,700,000 are redeemed along with $100,000 of interest. H. The liability in Transaction F is paid, less the retainage. I. A second progress billing is submitted, $2,500,000. The bill is approved and a voucher is prepared.

Explanation / Answer

A Estimated General Fund        60,00,000 Estimated Federal Grant        60,00,000     Appropriations for Construction of a Building 115,00,000     Appropriations for Construction of a Furnture & Equipment       5,00,000 B Cash on Fund Transferr        30,00,000    Capital Projects Fund     30,00,000 C Cash on Federal Government grant        60,00,000    Capital Projects Fund     60,00,000 D Investments        75,00,000    Cash for Investments     75,00,000 E Encumbrances      100,00,000    Reserved for Encumbrances 100,00,000 F Building Work in Progress        48,00,000    Encumbrances     48,00,000 G Cash        48,00,000    Interest Income       1,00,000    Investments     47,00,000 H Building Work in Progress        48,00,000    Retention Money       4,80,000    Cash     43,20,000 I Building Work in Progress        25,00,000    Encumbrances     25,00,000

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