Ed Management Services

Accounting for Capital Reserve Funds for Capital Construction

Dr. A250 Taxes Receivable $10,000,000

Cr. A980 Revenues $9,500,000

Cr. A 878 Capital Reserve $ 500,000

To record issuance of tax warrant funding of the reserve

Dr. A230 Cash-Special Reserves $500,000

Cr. A250 Taxes Receivable $ 500,000

To record collection of taxes for capital reserve fund

Dr. A511 Appropriated Reserves $500,000

Cr. A960 Appropriations $ 500,000

A9950.9 Transfer to Capital $500,000

To appropriate capital reserve balance for transfer to capital projects fund

Dr. A522 Appropriation Expense $500,000

A9950.9 Transfer to Capital $500,000

Cr. A230 Cash-Special Reserves $500,000

To record transfer of cash to capital projects fund

Dr. A 878 Capital Reserve $500,000

Cr. A909 Fund Balance $500,000

To adjust for use of capital reserve balance to finance capital construction

 

If the purpose of the reserve fund is the purchase of school buses, the same entries would be used except that the entry transferring cash to the capital projects fund would be unnecessary and the appropriation and expenditure entries would be as follows:

Dr. A511 Appropriated Reserves $500,000

Cr. A960 Appropriations $500,000

A 5510.21 Purchase of Buses $500,000

To appropriate capital reserve balance

Dr. A522 Appropriation Expense $500,000

A5510.21 Purchases of Buses $500,000

Cr. A230 Cash-Special Reserves

To record school bus purchases

 

In lieu of adjusting fund balance as shown above the expenditure account may closed to A878 Capital Reserve at year end rather than to A909 Fund Balance.

Last Updated: June 15, 2009