Investment Trust Fund. The Albertville City Council decided to pool the investments of its General Fund with Albertville Schools and Richwood Township in an investment pool to be managed by the city. Each of the pool participants had reported its investments at fair value as of the end of the last fiscal year. At the date of the creation of the pool, the fair value of the investments of each pool participant was as follows:

Required
a. Show the entry that should be made by the City of Albertville. Albertville Schools and Richwood Township to do the following: (1) open a new asset account, Equity in Pooled Investments, in the amount of the current fair value of the investments transferred to the pool (2) close the existing investments account: and (3) debit or credit the revenues account of each participant as needed to adjust for changes in fair value.
b. Show in general journal form the entries to be made in the accounts of the investment pool trust fund to record the following transactions of the first year of its operations:
(1) Record at current fair value the investments transferred to the pool; assume that the investments of the city€™s General Fund were in U.S. Treasury notes and the investments of both the schools and the township were in certificates of deposit (CDs).
(2) CDs that had been recorded at a fair value of $1,000,000 matured. The pool received $1,050,000 in cash ($1,000,000 for the face of the CDs and $50.000 interest). The entire amount was reinvested in a new issue of certificates of deposit.
(3) Interest on Treasury notes in the amount of $50,000 was collected.
(4) Interest on CDs accrued at year-end amounted to $28,250.
(5) At the end of the year. it was decided to compute and record the pool€™s liability or net assets held for each of the three participants for its proportionate share of earnings on the pooled investments. Assume that there were no changes in the fair value of investments since the investment pool was created. Carry your computation of each participant€™s proportionate share to two decimal places. Round the amount of the distribution to each fund or participant to the nearest dollar
c. Record in each of the participant€™s funds the increase in its Equity in Pooled Investment account.
d. The City of Albertville General Fund decided to withdraw $100,000 from the investment pool to obtain the cash it needed to acquire general capital assets. The investment pool trust fund sold $50,000 of its investments in U.S. Treasury notes (no interest had accrued on these investments) to obtain the cash needed for the withdrawal. Record the sale of U.S. Treasury notes. Record the cash withdrawal in the investment pool trust fund and the City of Albertville General Fund. Recalculate each participant€™s proportionate share of pooled investments after the withdrawal is made.
e. Explain how the investment trust fund would report the General Fund€™s interest in the investment pool and the Albertville School€™s interest in the investmentpool.

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Investments Prior Current Fair Value Fair Value $ 890,000 $ 900,000 City of Albertville General Fund Albertville Schools 4,200,000 4,230,000 Richwood Township 3,890,000 3,870,000 Total S৪,980,000 $9,000,000