College of Administration and Finance Sciences
Assignment (2)
Deadline: Saturday 11/11/2023 @ 23:59
Course Name: Government and Non-Profit
Student’s Name:
Accounting
Course Code: ACCT 321 Student’s ID Number:
Semester: First CRN:
Academic Year: 1445 H
For Instructor’s Use only
Instructor’s Name:
Students’ Grade: /15 Level of Marks: High/Middle/Low
Instructions – PLEASE READ THEM CAREFULLY
The Assignment must be submitted on Blackboard (WORD format only) via allocated
folder.
Assignments submitted through email will not be accepted.
Students are advised to make their work clear and well presented, marks may be reduced for
poor presentation. This includes filling your information on the cover page.
Students must mention question number clearly in their answer.
Late submission will NOT be accepted.
Avoid plagiarism, the work should be in your own words, copying from students or other
resources without proper referencing will result in ZERO marks. No exceptions.
All answers must be typed using Times New Roman (size 12, double-spaced) font. No
pictures containing text will be accepted and will be considered plagiarism.
Submissions without this cover page will NOT be accepted.
College of Administration and Finance Sciences
Assignment Question(s): (Marks 15)
(5 Marks)
Prepare entries to record the following transactions related to acquisition of capital
assets by a county. The county does not use encumbrance accounting.
a. The county issues general obligation bonds in the amount of SAR
900,000, receiving cash for the full face amount of the bonds. The cash
will be used to buy capital assets.
b. The county buys a prefabricated building for SAR 750,000, using part of
the bond proceeds. The building is delivered and the invoice for the
building is approved.
c. The invoice approved in b. is paid.
d. The General Fund transfers cash of SAR 55,000 to another fund in
anticipation of the payment of the first installment of interest (SAR
30,000) and principal (SAR 25,000) on the debt.
e. The first installment of debt service on bonds issued in (a) becomes due
and payable.
f. Debt service on the bonds issued in a. is paid.
Answer
a. Issuance of General Obligation Bonds
Details Debit Credit
Cash SAR 900,000
Bonds Payable SAR 900,000
b. Purchase of Prefabricated Building
Details Debit Credit
Building SAR 750,000
Cash SAR 750,000
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c. Payment for the Prefabricated Building
Details Debit Credit
Accounts Payable SAR 750,000
Cash SAR 750,000
d. Transfer of Cash to Another Fund
Details Debit Credit
Due to Other Fund SAR 55,000
Cash SAR 55,000
e. Recognition of Due Debt Service
Details Debit Credit
Expenditures - Interest SAR 30,000
Expenditures - SAR 25,000
Principal
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Due to Other Fund SAR 55,000
f. Payment of Debt Service:
Details Debit Credit
Due to Other Fund SAR 55,000
Cash SAR 55,000
Q2. Following information are related with Internal Service Fund of City of Jeddah. You are
required to prepare a Statement of Cash Flows for the year ended December 31, 2018.
College of Administration and Finance Sciences
(5 Marks)
Amount ($)
Operating income 68,400
Increase in Inventories 27,200
Interest received 800
Acquisition of Capital Assets 2,800
Payment to Suppliers 32,000
Depreciation expense 29,600
Payments for Rent 21,200
Increase in Accounts Payable 54,400
Receipts from Customers 378,400
Payment to Employees 200,000
Cash balance at the beginning of the year 584,800
Answer
City of Jeddah
Internal Service Fund
Statement of Cash Flows
For the Year Ended December 31, 2018
Operating Activities:
Receipts from Customers $378,400
Interest Received $800
Payment to Suppliers ($32,000)
Payments for Rent ($21,200)
Payment to Employees ($200,000)
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Net Cash Provided by Operating Activities $126,000
Investing Activities:
Acquisition of Capital Assets ($2,800)
Net Cash Used in Investing Activities ($2,800)
Financing Activities:
Increase in Accounts Payable $54,400
Net Cash Provided by Financing Activities $54,400
Net Increase in Cash
Cash at the Beginning of the Year $177,600
Cash at the End of the Year $762,400
Q3. The following transactions are related with a Township Debt Service Fund. Prepare journal
entries to record the transactions in the Debt Service Fund.
(5 Marks)
College of Administration and Finance Sciences
a. The Township levies a special property tax amounting to $1,750,000 to pay debt
service on its long-term general obligation debt. The tax must be accounted for in
the Debt Service Fund.
b. All the property taxes levied for debt service purposes are collected.
c. The Township invests $525,000 in a six-month certificate of deposit.
d. Debt service (interest of $350,000 and principal of $700,000) becomes due and
payable.
e. The debt service liabilities are paid.
f The certificate of deposit in c. matures and the Township receives a total of $535,500,
which includes $10,500 of interest.
Answer
a. Levying Special Property Tax
Dr
Taxes Receivable - Current $1,750,000
Revenues - Property Taxes $1,750,000
b. Collection of Property Taxes
Dr
Cash $1,750,000
Taxes Receivable - Current $1,750,000
c. Investment in Certificate of Deposit
Dr
Investments $525,000
Cash $525,000
College of Administration and Finance Sciences
d. Recognition of Due Debt Service
Dr
Expenditures - Interest $350,000
Expenditures - Principal $700,000
Due to Bondholders $1,050,000
e. Payment of Debt Service Liabilities
Dr
Due to Bondholders $1,050,000
Cash $1,050,000
f. Maturity of Certificate of Deposit
Dr
Cash $535,000
Interest Revenue $10,500
Investments $525,000
College of Administration and Finance Sciences
