Choose the best answer. Items 1 through 5 relate to the following information: The county collects taxes

Question:

Choose the best answer. Items 1 through 5 relate to the following information:

The county collects taxes on behalf of the county, city, and a special purpose district. For 2023, the taxes to be levied by the government are

1. What type of fund will the county use to account for tax collection and distribution?

a. A custodial fund.

b. A trust fund.

c. A special revenue fund.

d. The county’s General Fund.

2. On the date the taxes are levied, the county would credit which of the following accounts in the fund used to account for tax collection and distribution?

a. Due to Other Governments.

b. Revenues—Taxes.

c. Additions—Property tax collections for other governments.

d. Accrued Taxes.

3. On the date the taxes are collected the county would credit which of the following in the fund?

a. Due to Other Funds and Governments.

b. Taxes Receivable.

c. Additions—Property tax collections for other governments.

d. Undistributed Taxes.

4. To record the 1 percent administrative fee the county assesses, it would record a debit to which of the following in the fund?

a. Deductions—Administrative fee.

b. Receivable—Administrative fee.

c. Expenses—Administrative fee.

d. Due to County.

5. If the fund collected $1,280,000 in taxes what amount of cash would the special purpose district receive if taxes are proportionally distributed?

a. $25,600.

b. $25,344.

c. $25,856.

d. Not enough information to determine amount received. Items 6 through 8 relate to the following information:

The city council of the City of Great Falls decided to pool the investments of its General Fund with those of Great Falls School District and Great Falls Township, each of which carried its investments at fair value as of the prior balance sheet date. All investments are revalued to current fair value at the date of the creation of the pool. At that date, the prior and current fair value of the investments of each of the participants were as follows:

6. At the date of the creation of the investment pool, each of the participants should

a. Debit its Fund Balance account and credit its Investments account for the prior fair value of the assets transferred to the pool.

b. Debit or credit its Investments account as needed to adjust its carrying value to current fair value. The offsetting entry in each fund should be to Fund Balance.

c. Debit Equity in Pooled Investments for the current fair value of investments pooled, credit Investments for the prior fair value of investments pooled, and credit or debit Revenues—Change in Fair Value of Investments for the difference.

d. Make a memorandum entry only.

7. One day after creation of the pool, the investments that had belonged to Great Falls Township were sold by the pool for $1,760,000.

a. The loss of $40,000 is borne by each participant in proportion to its equity in the pool.

b. The loss of $10,000 is considered to be a loss borne by Great Falls Township.

c. The loss of $40,000 is considered to be a loss borne by Great Falls Township.

d. The loss of $10,000 is borne by each participant in proportion to its equity in the pool.

8. One month after creation of the pool, earnings on pooled investments totaled $59,900. It was decided to distribute the earnings to the participants, rounding the distribution to the nearest dollar. The Great Falls School District should receive

a. $36,000.

b. $35,940.

c. $36,339.

d. $37,000.

Items 9 and 10 are based on the following information:

Fairview County contributes to and administers a single-employer defined benefit pension plan on behalf of its covered employees. The following information is available for the current year: