7C. 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, 2015:

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accrued Interest Receivable . . . . . . . . . . . . . . . . . . Investments in Corporate Bonds . . . . . . . . . . Net Assets Held in Trust .................. . . . . . . . . .

Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Debits

$ 49,500 7,500 750,000

$ 807,000

Credits

$ 807,000 $ 807,000

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, 2015: (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 $206,026, 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

$4,000 and was received in cash. (5) On December 1, RST Corporation stock was sold for $203,500 cash. Those

funds were immediately invested in UVW Corporation stock. (6) On December 15, cash scholarships in the amount of $50,000 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 Assets.

7C. 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, 2015:

12

Continuous Problem City of Monroe

Debits

Cash $140,000

Credits

$27,000 8,275,000 $8,302,000

Accrued Interest Receivable Investments: Bonds Investments: Common Stock Accounts Payable

Net Assets Held in Trust for Employee Benefits Totals

72,000 5,300,000 2,790,000

$ 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, 2015: (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 $386,900, 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

$575,000. (5) Annuity benefits in the amount of $377,400, 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 $507,500, were paid in cash. (7) During the year, common stock valued at $505,000 was sold for $506,800. A

portion of these funds, $502,000 were invested in common stock of a different

company. (8) At year-end, the market value of investments in bonds increased by $12,750; the

market value of investments in stocks decreased by $5,770. 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 Assets.

7C. Part 3. Fiduciary Fund Financial Statements Required: Using the balances from Parts 1 and 2 prepare the following:

Statement of Changes in Fiduciary Net Assets.

Statement of Fiduciary Net Assets