College of Administration and Finance Sciences
Assignment (2)
Deadline: Saturday 6/11/2021 @ 23:59
Course Name: GNP Accounting
Student’s Name:
Course Code: ACCT 321
Student’s ID Number:
Semester: 1st
CRN:
Academic Year: 1443 H
For Instructor’s Use only
Instructor’s Name:
Students’ Grade:
/5
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 5)
Q1. Distinguish between Capital Projects Funds (CPF), Debt Service Funds (DSF) Leased
Assets and Permanent Funds
Q2. The Tawain Township Debt Service Fund accumulates resources to pay its $4 million
general obligation debt. The debt is payable in equal annual installments of principal over
10 years with 5% interest on the unpaid principal. Prepare journal entries to record the
following transactions in the Debt Service Fund.
a. The Township levies a special property tax amounting to $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 $250,000 in a six-month certificate of deposit.
d. Debt service (interest of $2,000,000 and principal of $4,000,000) becomes
due and payable.
e. The debt service liabilities are paid.
Q3. The City Taif uses an Internal Service Fund (ISF) to provide centralized printing
services for all City agencies. City agencies are billed on a per-page basis (number of pages
in a document times the number of documents printed). The City requires the ISF to
develop its billing rate so as to recover all costs on the accrual basis of accounting, plus the
cost of repaying a start-up loan made by the City to the ISF. Compute the rate per page to
be charged by the ISF, based on the following factors:
a. Start-up loan from City to ISF – $500,000 non-interest bearing loan, to be
repaid in equal payments over 10 years
b. Printing equipment – estimated to cost $600,000 and to have an average life
of 10 years
c. Personnel costs – Estimated salaries of $750,000, plus contribution to
Pension Trust Fund of 10% of salaries
d. Paper- Opening inventory of $26,000; expected purchases of $92,000;
expected ending inventory of $22,000
e. Occupancy costs – Estimated at $150,000 per year
f. Expected number of pages to be printed – 10 million
College of Administration and Finance Sciences
Q4. Heat Village maintains a Pension Trust Fund for its employees. At the start of the year,
the Fund holds cash of $150,000 and investments that have a fair value of $4,000,000. The
Fund has the following transactions. Prepare entries to record them in the Fund’s accounts
a. Bills the General Fund $200,000 for the required annual contribution. The pension plan
does not require contributions from the employees
b. Receives payment of $200,000 from the General Fund
c. Receives interest and dividend income of $150,000 in cash on its investment portfolio
d. Receives $215,000 from selling investments carried on the books at $200,000
e. Makes new investments totaling $275,000
Q5. Prepare entries to record the following transactions, showing which funds are affected. If
a transaction affects more than one fund, prepare entries for all affected funds.
a. The county adopts the following budget for its General Fund on January 1, 2019.
Estimated revenues:
Property taxes
$520,000
Sales taxes
80,000
Appropriations:
Salaries
480,000
Supplies and other
60,000
Transfer to Debt Service Fund
50,000
b. The county sends property tax invoices to all property owners. To raise the needed
$520,000, the county sends tax bills for $525,000, anticipating that some will not pay.
c. Property owners pay taxes amounting to $500,000. The county writes off $5,000
in taxes as uncollectible. The remaining taxpayers declared delinquent, and the county
adds interest and penalties of $1,000 to their tax bills. The county believes that all
delinquent taxpayers will pay their bills between April 1 and June 30, 2020.
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