The newly formed Buffalo School District engaged in the following transactions and other events during the year:
1. It levied and collected property taxes of $110 million.
2. It issued $30 million in long-term bonds to construct a building. It placed the cash received in a special fund set aside to account for the bond proceeds.
3. During the year it constructed the building at a cost of $25 million. It expects to spend the $5 million balance in the following year. The building has an estimated useful life of 25 years.
4. It incurred $70 million in general operating costs, of which it paid $63 million. It expects to pay the balance early the following year.
5. Ittransferred$12millionfromitsgeneralfundtoafund established to account for resources set aside to service the debt. Of this, $10 million was for repayment of the debt; $2 million was for interest.
6. From the special fund established to service the debt, it paid $2 million in interest and $6 million in principal.
7. It collected $4 million in hotel taxes restricted to promoting tourism. Since there sources were restricted they were accounted for in a special restricted fund. During the year, the district spent $3 million on promoting tourism.
8. The district established a supplies store to provide supplies to the district’s various departments by transferring $4 million from the general fund. It accounted for the store in an internal service (proprietary) fund. During the year the store purchased (and paid for) $2 million in supplies. Of these it ‘‘sold’’ $1 million, at cost (for cash), to departments accounted for in the general fund. During the year these departments used all of the supplies that they had purchased.
a. Prepare journal entries to record the transactions and other events in appropriate funds. Assume that governmental funds are accounted for on a modified accrual basis and focus only on current financial resources (and thus do not give balance sheet recognition either to capital assets or long-term debts). Proprietary funds are accounted for on a full accrual basis.
b. Prepare a combined balance sheet—one that has a separate column for each of the governmental funds you established.
c. Prepare a combined statement of revenues, expenditures, and changes in fund balances for all governmental funds. Prepare a separate statement of revenues, expenses, and changes in fund net position for any proprietary funds you established.
d. Prepare a government-wide statement of net position and a government-wide statement of activities in which all funds are consolidated and are accounted for on a full accrual basis. Be sure to include both long-term assets and liabilities on the statement of net position and to depreciate the long-term assets. Also, be sure to adjust for any inter-fund activity. You may find it helpful to redo the journal entries you made in Part (a), this time recording the transactions (and not the inter-fund activity) as if the district accounted for its activities in a single entity and on the full accrual basis.