Question
A citizen group raised funds to establish an endowment for the Eastville City Library. Under the terms of the trust government, the principal must be
A citizen group raised funds to establish an endowment for the Eastville City Library. Under the terms of the trust government, the principal must be maintained, but the earnings of the fund are to be used to purchase database and periodical subscriptions for the library. A preclosing trial balance of the library permanent fund follows:
Trial Balance-December 31, 2017 | Debits | Credits |
Cash | $ 11,000 |
|
Investments | 528,000 |
|
Additions to permanent endowments |
| $517,500 |
Investment income |
| 55,500 |
Expenditures-subscriptions | 44,500 |
|
Intergovernmental grant |
|
|
Net increase in fair value of investments |
| 10,500 |
Accrued interest receivable | 3,250 |
|
Accounts payable |
| 3,250 |
| $586,750 | $586,750 |
a. Prepare any closing entries necessary at year-end
b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the library permanent fund.
c. Prepare a balance sheet for the Library Permanent Fund (Used Assigned to Library for any spendable fund balance).
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