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EX.3.4 Encumbrances are recorded in a capital projects fund similar to a general fund. Wickliffe County authorized the isuance of bonds and contracted with the USA Company (UCC) to build a new sports complex. During 2014, 2015, and 2016 the county engaged in the transactions that follow. All were recorded in a capital projects fund. I. In 2014 the county issucd $310 million in bonds (and recorded them as "bond proceeds," an account comparable to a revenuc account). It approved the sports complex contract for $310 million and encumbered the entire amound. It received from UCC an invoice for construction to date for $114 million, an amount recognized as an expenditure. 2. 3. 4. It paid UCC the amount owed 5. In 2015 it received from UCC an invoice for an additional $190 million. 6. It paid the amount in full. 7. In 2016 UCC completed the sports facility and billed the county an aditional $7 million. The county approved the additional costs, even though the total cost was now $311 million, SI million more than initially estimated The county transferred SI million from the general fund to the capital projects fund. The county paid the $7 million. 8. 9. closing entries, to record the transactions in the capital projects at each year subsequent to the first. Instead, it can close the expendi- b. What other funds, other than the capital projects fund, statements, or schedules would be affected a. Prepare the journal entrics, fund. Assume that expenditures do not have to be appropriated each year. Hence, the county nced not reestablish tures of the second and third yeans to reserve for encumbrances rather than fund balance by the transactions

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