Multiple Choice. Choose the best answer.

Items 1 through 3 relate to the following information.

The county administers a tax agency fund that collects taxes on behalf of the county city, and a special purpose district. For 2011, the taxes to be levied by the government are:

County                                                $ 632.000

City                                                      917,000

Special purpose district                        26,000

Total                                                  $1,575,000

1. On the date the taxes are levied, the city would debit which of the following accounts?

a. Due from Tax Agency Fund.

b. Equity in Tax Agency Fund.

c. Taxes Receivable.

d. No journal entry is recorded since the city is not collecting the taxes.

2. On the date the taxes are levied, the tax agency fund would credit which of the following accounts?

a. Due to Other Funds and Governments.

b. Revenues'Taxes.

c. Additions'Other Funds and Governments.

d. Accrued Taxes.

3. If the tax agency fund assessed a 1 percent administrative fee, it would be recorded by the agency fund as a credit to:

a. Revenue.

b. Transfer In.

c. Additions'Fund Equity.

d. Due to County.

Items 4 through 7 relate to the following information:

The city council of the City of Cadillac decided to pool the investments of its General Fund with that of Cadillac School District and Cadillac 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:

4. 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.
5. At the date of creation of the pool, the City of Cadillac should account for all the pooled investments in:
a. An investment trust fund at fair value at the date the pool is created.
b. An agency fund at fair value as of the prior balance sheet date.
c. Its General Fund at fair value at the date the pool is created.
d. Its General Fund at fair value as of the prior balance sheet date.
6. One day after creation of the pool, the investments that had belonged to Cadillac 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 borne by each participant in proportion to its equity in the pool.
c. The loss of $40,000 is considered to be a loss borne by Cadillac Township.
d. The loss of $10,000 is considered to be a loss borne by Cadillac Township.
7. 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 Cadillac School District should receive:
a. $36,000.
b. $35,940.
c. $36,339.
d. $37,000.
Items 8 through 10 are based on the following information: The City of Lindenwood contributes to and administers a single-employer defined benefit pension plan on behalf of its covered employees. The city uses a trust fund to account for and report its pension plan. Annual pension cost and actual contributions made for the past three years were as follows:

8. For 2011, what would be the credit to Additions'Employer Contributions in the pension trust fund?
a. $32,000.
b. $31,500.
C. $1,000.
d. $500.
9. To record the 2011 pension contribution to the pension trust fund, what account would the General Fund debit?
a. Other Financing Uses'Interfund Transfers Out.
b. Expenditures.
c. Due to Pension Fund.
d. Deductions Employer Contributions.
10. Over the three-year time period, what has happened to the net pension obligation?
a. It has increased.
b. It has decreased.
c. It has stayed the same.
d. The reader cannot tell based on the informationprovided.

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Investments Prior Current Fair Value Fair Value $ 600,000 3,600,000 $ 590,000 General Fund Cadillac School District 3,640,000 Cadillac Township 1,800,000 1,770,000 Total $6,000,000 $6,000,000