The following transactions occurred during the fiscal year July 1, 2021 to June 30, 2022: 1. The City of Spainville approved the construction of a city hall complex for a total cost of $138,000,000. A few days later, a contract with a 5 percent retainage clause was signed with Paltrow Construction for the complex. The buildings will be financed by a federal expenditure-driven grant of $28,750,000 and a general obligation bond issue of $115,000,000. During the current year, investment revenue of $4,600,000 is budgeted. (Assume the budget is recorded in the accounts and encumbrance accounting is used.) 2. The bonds were issued for $103,500,000 (the face amount of the bonds was $115,000,000). The difference between the actual cost of the project and the bond and grant proceeds was expected to be generated by investing the excess cash during the construction period. 3. The city collected the grant from the government. 4. The city invested $103,500,000. 5. The contract signed with Paltrow stipulated that the contract price included architect fees. The architects were paid their fee of $51,750 by Spainville. Retainage does not apply to the architect fees. (Assume a Vouchers payable account is used.) 6. Paltrow submitted a progress billing for $28,750,000. The billing, less 5 percent retainage, was approved. Assume that the city will use resources from the federal grant to make this payment. 7. Investments that cost $5,750,000 were redeemed for a total of $5,773,000. Note: The $23,000 increase represents interest income. 8. Interest income totaling $4,025,000 was received in cash. 9. The contractor was paid the amount billed in transaction 6, less a 5 percent retainage. 10. The contractor submitted another progress billing for $28,750,000. The billing, less retainage, was approved. 11. Investments totaling $16,790,000 were redeemed, together with additional interest income of $1,610,000. 12. The contractor was paid the amount billed in transaction 10, less a 5 percent retainage. 13. Interest income of $287,500 was accrued. 14. Bond interest totaling $11,500,000 was paid.

*Prepare a statement of revenues, expenditures, and changes in fund balance for the year ended June 30, 2022, and a balance sheet as of June 30, 2022.

*Prepare the journal entry or entries necessary to record the remainder of the budget and to reestablish the budgetary accounts for encumbrances as of July 1, 2022. Assume investment revenues of $2,300,000 are expected in the 2023 fiscal year.

Answer rating: 100% (QA)

Statement of Revenues Expenditures and Changes in Fund Balance For the Year Ended June 30 2022 Reven... View the full answer