Question

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, 2017:

	Debits	Credits
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$ 50,500
Accrued Interest Receivable . . . . . . . . . . . . . . . . . .	7,500
Investments in Corporate Bonds . . . . . . . . . .	750,000
Net position Held in Trust ……………… . . . . . . . . .		$ 808,000
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$ 808,000	$ 808,000

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, 2017:

(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 $205,500, 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 $2,000 and was received in cash.

(5) On December 1, RST Corporation stock was sold for $204,000 cash. Those funds were immediately invested in UVW Corporation stock.

(6) On December 15, cash scholarships in the amount of $48,000 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 position.

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, 2017:

	Debits	Credits
Cash	$137,000
Accrued Interest Receivable	75,000
Investments: Bonds	5,300,000
Investments: Common Stock	2,790,000
Accounts Payable		$27,000
Net position 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, 2017:

(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 $212,000, 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 $650,000.

(5) Annuity benefits in the amount of $325,400, 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 $460,700, were paid in cash.

(7) During the year, common stock valued at $505,000 was sold for $506,800. A portion of these funds, $500,000 were invested in common stock of a different company.

(8) At year-end, the market value of investments in bonds increased by $7,750; the market value of investments in stocks decreased by $3,250.

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 position.

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 position.

2. Statement of Fiduciary Net position

Answer 1

Journal entry in Books of Monroe scholar ($ Date May 15000 Particular Casha Alc Dr. 22500 To Interest received Alc To Accured interest receivable Ak (Bring first five year interest received on Corporate bond) 7500 Dr. 205500 205500 Cash Ale - To Contribution received (Being additional contribution received in Cash) June 15 Dr. 200000 200000 Investment in RST Stock To Cash Alc (Being amount invested) Dr. 22500 Nov & 22500 Cash Al To Interest received (Being second half year interest received) Dr. 2000 Nov 15 2000 Cash Ak To dividend Income ( Being dividend Income I received)

Cash Alc To To -Dr. 204000 Investment in RST stock Profit on sale of RST Stock / (Being RST Stock 200000 4000 soldi uuw Corporation stuck Dr 204000 To Cash Ale (Being stock purchased) 204000 15 ЧВоро Scholarship Paid Ale - To Cashi Ale ( Being scholarship paid) 48000 C31 Dol 7500 Interest Receivable Ale To interest Received Alc ( Being interest accrued) 7500 4.31 lo-sporation Bond Ale Dr. 2100 To Profit on Revaluation (Being revaluation of Bond) 2100 5000 431 loss on Revaluation Dr. To uvw company stock (Bring revaluation of sto

20400O 48000 Cash Alc To balance 6ld 50500 By Inuestment in RST stock 200000 To interest received 15000 By Uvw stock To Accured interest Receivable 1500 | By Scholarship To contribution Received 205500 To Interest received 22500 nce old To dividend gncome 2000 To sale of RST Stock 204000. 55000 507000 507000 To balance To Interest old Accured 7500 7500 Interest Receivable Cash. - balance eld - Ale. 7500 7300 15000 15000 Investment in corporate Bond. To balance 6ld in 750000 By balance qd. 752100 To probiti on Rovaluation 2100 752100 752100 - Cash To balance tld 200ooo Investment in RST stock 2ooove I By Cash 20000 200000 Investment in Uvw Corporation stocles loss on Revaluation 5000 I By balance cld 199000 очоо - To Ceesh 204000 204000

Date Page To balance old, Contibection received 2055oo | By Cash 205500 ODDD Alc. 205500 1000 2000 2055oo Interest 45000 Received Ale loss Cash 15000 lash 225oo By Interest receivable 7500 To Ale Profit Dividend & Loss 2000 2000 Income By Cash 2000 2000 Profit on sale of To profit & Loss 4000 By Cash Investment 4000 Yooo 4000 Paid Ale it To Scholarship 48000 48000 cash eloss 48000 чboo o stock - To uvw profit I loss on Revaluation 5000 By losportion Bond By Profit eloss 2100 2900