Chapter $7$ Fiduciary Funds

Part $1.$ Pension Trust Fund Transactions

The City of Monroe offers a retirement savings $($defined contribution$)$ plan to police officers. Police employees may contribute up to $$10,000$ on a pre$-$tax basis to the plan. The City matches the amount of the employee contribution and manages the plan through a pension trust fund. Police Department pension plan, a single$-$employer, defined$-$contribution plan, reported the following account balances as of January $1,2024$:

Debits Credits

Cash $ $162,000$

Accrued Interest Receivable $62,000$

Investments: Bonds $5,300,000$

$2,790,000$

Investments: Common Stock $ $37,000$

Net position Held in Trust for Employee Benefits $8,277,000$

Totals $ $8,314,000$ $$8,314,000$

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 $31,2024$:

$(1)$ Member contributions were received in the amount of $$395,000.$ The City General Fund contributed the same amount.

$(2)$ Interest was received in the amount of $$215,000,$ including the accrued interest receivable at the beginning of the year. The interest accrual at year end amounted to $$76,000.$

$(3)$ During the year, dividends received on common stock amounted to $$125,000.$

$(4)$ Investments were made during the year in common stock in the amount of $$650,000.$

$(5)$ Retired police officers requested withdrawals of $$402,500$ and refunds to nonvested terminated employees of $$40,600.$ Both amounts were recorded as accounts payable.

$(6)$ Accounts payable, in the amount of $$440,200,$ were paid in cash.

$(7)$ During the year, common stock valued at $$505,000$ was sold for $$510,000.$ 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 $$6,400$; the market value of investments in stocks decreased by $$890.$

Part $2.$ Custodial Funds

The City of Monroe maintains two custodial funds:

a$)$ The Inmate Custodial Accounts fund holds money belonging to individuals incarcerated in the City jail. Inmates may receive cash from family members or as compensation for working in the jail kitchen or laundry. The City maintains separate balances for each inmate. Inmates request the City to disburse their cash to purchase snacks, hygiene items, or reading materials. Any unexpended balance is refunded to inmates upon release at the completion of their sentence. No funds are expended until requested by the inmate and inmates commonly serve up to $18$ months in the city jail.

The Inmate Custodial Accounts fund had the following balances at January $1,2024$:

Debits Credits

Cash $ $11,000$

Accounts Payable $ $500$

Net position Held in Trust for Inmates $10,500$

Totals $ $11,000$ $ $11,000$

Record the following transactions

$1.$ Receipts from inmate families totaled $ $9,000$ and deposits from inmates working in the jail totaled $ $14,000.$

$2.$ Inmates requested disbursements totaling $$21,000$ for the year.

$3.$ Payments were made in the amount of $ $19,800$ for allowable purchases.

$4.$ Inmates completing their sentences were refunded $ $4,200$ of their balances.

b$)$ The Crime Victim Restitutions fund accounts for the receipt and disbursement of cash received from convicted individuals. As part of their sentencing$,$ individuals convicted of crimes involving theft or property damage frequently must make payments to compensate victims for loss. The court determines the amounts and establishes a payment schedule. Victims receiving restitution do not have to request payment. By statute the City is required to disburse restitution amounts to the designated victim by the $10$th day of the month following receipt of restitution amounts.

The Crime Victim Restitutions fund had the following balances at January $1,2024$:

Debits Credits

Cash $ $7,500$

Payable to Crime Victims $ $7,500$

Net position $0$

Totals $ $7,500$ $ $7,500$

Record the following transactions:

$1.$ Restitution payments were received in the amount of $ $96,000$ for the year

$2.$ Payments to crime victims totaled $ $95,300$ for the year.

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.