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Capital project fund journal entries examples

04/05/2021 Client: muhammad11 Deadline: 2 Day

Accounting Project - Government/Enterprise Funds
Subject
Business Finance

Question Description
Introduction

The date is December 31, 2091. You have just risen from a three-month cryogenic sleep during which you traveled from Earth to Europa, the only inhabited moon of Jupiter.

Europa has been colonized since the early 2060's. To encourage development, the United Earth Council (roughly equivalent to a federal government for the planet Earth) gave land grants to colonists willing to leave Earth and settle this new world. The Council also built a series of water purification and power generating plants. These plants utilize the natural geothermal resources of Europa to generate electrical power.

Most of the inhabitants are engaged in the operation of the quarter million-acre farms, which span the temperate zones on either side of the equator. The labor is performed by robots through a centralized computer under the direction of the owner/farmer and family members. Harvests are transported by freighter to Earth. It is a lonely, although profitable life with an average of 10 harvests per Earth year. All banking is performed on Earth through electronic funds transfers. A substantial business sector has developed, servicing the farming operations.

After several decades of hard work, the inhabitants of Europa are beginning to enjoy the rewards of their labors and are seeking some of the services which can only be provided by a local centralized government. They naturally sought to establish this government on Europa and petitioned the United Earth Council for admission to the Council as a member province (roughly equivalent to the 20th century state governments).

Province status was granted by a vote of the Council, and the citizens of Europa acted quickly to organize their new government, which officially began operations on January 1, 2091. One of the tasks facing the new government was to hire qualified people to carry on the day to day business of the government. You represent one of these people, having been highly trained in the subtleties of governmental accounting. Ownership of public facilities, which were constructed by the United Earth Council (Buildings, roads and the electrical power utility), was transferred to the new province as of midnight on 12-31-2090. In return, the Province issued long-term bonds payable which provide for interest and principal payments to the United Earth Council over the next 20 years.

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