Question
(1)A wealthy businessman donated $50 in marketable securities to the District to establish a fund to help financially distressed park maintenance retiree. Per the trust
(1)A wealthy businessman donated $50 in marketable securities to the District to establish a fund to help financially distressed park maintenance retiree. Per the trust agreement only the interest and dividends from the securities can be distributed to recipients. The recipients will be selected by a committee of board members from the businessman's company.
(2)The district received $5 in interest from the marketable securities. The district paid $4 from the trust to cover the living expense of a group of park retirees who were selected by the committee.
Requirement:
(a)Preparem appropriate journal entries to record the transactions in individual funds. Governmental funds are accounted for on a modified accrual basis; proprietary funds on a full accrual basis.
(b)Based on the entries, prepare for the governmental funds a balance sheet and a statement of revenues, expenditures, and changes in fund balances.
(c)Prepare for the one proprietary fund (the internal service fund), a statement of net position (a balance sheet), and a statement of revenues, expenses, and changes in fund net position.
(d)Prepare governmentwide statement of net position (balance sheet) and a governmentwide statement of activities (statement of revenues and expenses). These statements should consolidate all funds, including the internal service fund, and should be on a full accrual basis. Assume that the district charged depreciation of $40 on recreational facilities (in addition to the amount charged in the internal service fund). Although internal service funds are categorized as proprietary funds, they typically provide most of their services to governmental activities. Hence, in the governmentwide statements, they are generally consolidated with the governmental funds rather than with enterprise funds.
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