Assume at the beginning of 2020 the Village of Ashlawn Street and Highway Fund (a special revenue fund) has cash of $336,000 offset by assigned fund balance in the same amount.
1. During the year, the State notified the Village that $500,000 for the Street and Highway Fund will be awarded for work performed on several bridges over the next two years. The grant is a cost reimbursement arrangement (no budget entry is necessary).
2. During the year, the Village signed contracts for bridge repairs that amounted to $440,000.
3. The bridge repairs were completed and an invoice was received for $435,000, of which $362,000 was paid in cash.
4. The special revenue fund reimbursed the General Fund for a payment the General Fund made on behalf of the Street and Highway Fund in the amount of $2500. This amount is not related to the bridge repairs under the state grant.
5. The state government paid the Village $412,000 on work completed under the grant before year-end.
Required:
a. Prepare the journal entries for the above transactions. Prepare Closing entries for year-end.
b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the special revenue fund.
c. Prepare a Balance Sheet.
