continuous problem

Project Description:

chapter 7 – fiduciary funds

7–c. part 1. private purpose trust fund transactions

the city of monroe scholarship foundation private-purpose trust fund had the following account balances on january 1, 2015:
debits credits
cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 49,500
accrued interest receivable . . . . . . . . . . . . . . . . . . 7,500
investments in corporate bonds . . . . . . . . . . 750,000
net assets held in trust ……………… . . . . . . . . . $ 807,000
totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 807,000 $ 807,000

required:
a. open a general journal for the city of monroe community foundation trust fund and record the following transactions for the year ending december 31, 2015:
(1) on may 1, the first semiannual interest payment was received on the corporate bonds. the bonds pay 6 percent annual interest, semiannually on may 1 and november 1.
(2) during the first half of the year, additional contributions from individuals and foundations amounted to $206,026, in cash. from these funds, $ 200,000 were invested in rst corporation stock on june 15.
(3) on november 1, the second semiannual interest payment was received from the investment in bonds.
(4) on november 15, a dividend was declared by rst corporation in the amount of $4,000 and was received in cash.
(5) on december 1, rst corporation stock was sold for $203,500 cash. those funds were immediately invested in uvw corporation stock.
(6) on december 15, cash scholarships in the amount of $50,000 were made to various college students.
(7) on december 31, an accrual was made for year-end interest on the corporate bonds.
(8) also, on december 31, it was determined that the market value of the corporate bonds, exclusive of accrued interest, was $ 752,100 and that the market value of uvw company stock was $ 199,000.

b. post the entries to the community foundation trust ledger (t-accounts).

c. prepare and post an entry closing all nominal accounts to net assets.


7–c. part 2. pension trust fund transactions

the city of monroe police department pension plan, a single-employer, defined-benefit plan, reported the following account balances as of january 1, 2015:

debits credits
cash $140,000
accrued interest receivable 72,000
investments: bonds 5,300,000
investments: common stock 2,790,000
accounts payable $27,000
net assets held in trust for employee benefits 8,275,000
totals $ 8,302,000 $8,302,000

required:
a. open a general journal for the city of monroe police department pension trust fund and record the following transactions for the year ending december 31, 2015:
(1) member contributions were received in the amount of $400,000. the city general fund contributed the same amount.
(2) interest was received in the amount of $386,900, including the accrued interest receivable at the beginning of the year. the interest accrual at year end amounted to $86,000.
(3) during the year, common stock dividends amounted to $125,000.
(4) investments were made during the year in common stock in the amount of $575,000.
(5) annuity benefits in the amount of $377,400, disability benefits of $ 82,020 and refunds to nonvested terminated employees of $39,800 were recorded as liabilities.
(6) accounts payable, in the amount of $507,500, were paid in cash.
(7) during the year, common stock valued at $505,000 was sold for $506,800. a portion of these funds, $502,000 were invested in common stock of a different company.
(8) at year-end, the market value of investments in bonds increased by $12,750; the market value of investments in stocks decreased by $5,770.

b. post the entries to the police department pension trust ledger (t-accounts).

c. prepare and post an entry closing all nominal accounts to net assets.



7–c. part 3. fiduciary fund financial statements

required: using the balances from parts 1 and 2 prepare the following:

1. statement of changes in fiduciary net assets.

2. statement of fiduciary net assets
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