Chapter 8-9, only the journal entries required.

Chapter 8 Recording Transactions Affecting a Fiduciary FundAn Investment Trust Fund The city council of the City of Bingham decided in late 2014 to create an investment pool that would put the city's investments under professional management. The pool will be accounted for as an investment trust fund. The name of the fund, when it is established in early 2015, will be the Investment Pool Fund. The initial participants in the Investment Pool Fund will be the city's debt service fund and the Bingham R4 Consolidated School District (CSD). The pool will be accounted for in accordance with GASB standards applicable to fiduciary funds; therefore, the city's debt service fund assets managed by the investment pool will not be reported in the Investment Pool Fund financial statements. Unless there is a request for a withdrawal, investment earnings and changes in the fair value of investments are distributed to participants only at year-end. During the year, investment earnings are added to an Undistributed Earnings on Pooled Investments account and changes in fair value are added to or subtracted from an Undistributed Change in Fair Value of Investments Account. a. Record the following transactions that occurred during 2015 in the Investment Pool Fund. Do not forget to click on [Year] to change the date to 2015. Please remember that before closing the City of Bingham, you must click on [File], and [Save/Save As] to save your work. Your work is NOT automatically saved. 1. [Para. 8-a-1] On March 1, 2015, the Investment Pool Fund was formally established with the receipt of $190,000 in cash from the city's own debt service fund, plus receipt from the Bingham CSD of bonds having a market value of $605,000 on this date. The bonds purchased by the Bingham CSD had a book value of $600,000 on March 1, 2015. The bonds receive semiannual interest of 5 percent per annum, on July 1 and January 1 each year. The CSD's equity is to also be credited for $5,000, which represents the two months of interest receivable on the bonds for January and February 2015. 2. [Para. 8-a-2] The Investment Pool Fund manager purchased 4 percent bonds on March 1 in the amount of $150,000. Because the bonds pay interest semi-annually on January 1 and July 1, $1,000 in accrued interest was also paid. (Note: Interest Receivable on Investments should be debited for the accrued interest.) 3. [Para. 8-a-3] On March 1, the Investment Pool Fund manager also purchased a 9-month certificate of deposit (CD) for $30,000. The interest rate on the CD is 1 percent per annum. 4. [Para. 8-a-4] On July 1, interest on the bonds in the amount of $18,000 ($15,000 and $3,000) was received in cash. (Note: Adjust for accrued interest.) 5. [Para. 8-a-5] On November 30, the 9-month CD matured and interest was received. 6. [Para. 8-a-6] On December 31, interest was accrued on bond investments. 7. [Para. 8-a-7]. On December 31, the fair value of investments in bonds was $760,000. (Note: Credit Undistributed Change in Fair Value of Investments for the increase in fair value.) 8. [Para. 8-a-8]. On December 31, the proportionate equities of the city's debt service fund and the Bingham CSD were calculated and investment earnings and changes in fair value of investments were distributed accordingly. In the journal entries round all calculations to the nearest whole dollar. (Note: You should complete 8-c below prior to making this journal entry.) 9. [Para. 8-a-9]. Subsequent to the distribution of earnings and changes in fair value, the Bingham CSD withdrew $100,000 to meet certain obligations coming due. To provide the cash needed for the withdrawal, the Investment Pool Fund manager sold 5 percent bonds on December 31 for $100,000, plus interest of $2,500, receiving in total $102,500 from the sale. (Note: Adjust Interest Receivable on Investments for the interest received.) b. Post the journal entries for all the preceding transactions then prepare and postclosing entries to close the temporary accounts. Be sure and click on the check mark for [Closing Entries] and check that \"Closing Entry\" appears in the [Transaction Description] box for each account closed. c. Prepare a schedule in good form showing the proportionate equities of each of the Investment Pool Fund's two participants before the Bingham CSD's $100,000 withdrawal on December 31, 2015. Round calculations to four decimal places. d. Prepare a schedule in good form showing the proportionate equities of each of the Investment Pool Fund's two participants after the Bingham CSD's $100,000 withdrawal on December 31, 2015. Round calculations to four decimal places. e. Export the post-closing trial balance and prepare a statement of net position for the Investment Pool Fund as of December 31, 2015. (Note: To avoid a rounding error use a spreadsheet to calculate the proportionate share of each asset held by the CSD: Asset account*[CSD total equities after withdrawal/Total equities. Follow the format of Illustration A2-10.) f. Export the pre-closing trial balance for this fund and prepare a statement of changes in net position for the Investment Pool Fund for the year ended December 31, 2015. (Note: Follow the format of Illustration A2-11.) Print and retain all the documents generated in paragraphs c. through f. in your cumulative file until told to submit this assignment by your instructor, unless submission by e-mail is specified. Chapter 9 Adjusting and Closing Entries for Governmental Activities, Government-Wide Level; Preparation of Government-Wide and Major Fund Financial Statements Before the 2014 basic financial statements, both government-wide and fund, can be prepared for the City of Bingham, you must first record and post adjusting and closing entries for governmental activities as described below. a. [Para. 9-a] Record depreciation expense for the year 2014 in the governmental activities general journal at the government-wide level using the following information. Verify accuracy of the adjusting entries and post to the general ledger by clicking [Post Entries]. Depreciation Expense Applied to Functions: General Government $ 640,000 Public Safety 1,280,000 Public Works 480,000 Health and Welfare 320,000 Culture and Recreation 320,000 Total depreciation expense $3,040,000 Depreciation Applicable to Asset Categories (Increases in accumulated depreciation): Improvements Other Than Buildings $ 180,000 Infrastructure 580,000 Buildings 460,000 Equipment 1,820,000 Total depreciation expense $3,040,000 b. [Para. 9-b] Provide the journal entries to reclassify the current portion of long-term debt related to the 5% and 3% serial bonds payable. c. Although closing entries were made in each governmental fund of this cumulative problem, they have not yet been recorded at the government-wide level. Required: [Closing Entries] Provide the journal entries required on December 31, 2014, to close all temporary accounts for governmental activities at the governmentwide level. These entries should also recognize changes in Net PositionNet Investment in Capital Assets and Net PositionRestricted for Debt Service. For each account to be closed or reclassified, be sure the check mark for [Closing Entry] is on and that \"Closing Entry\" appears in the [Transaction Description] box. Post the closing entries to the general ledger by clicking on [Post Entries]. d. Use the exportable trial balances used in Chapters 2 through 7 of this problem, and the exportable pre-closing trial balance and post-closing trial balance for governmental activities, to prepare all government-wide and fund financial statements that must be presented by the City of Bingham in order for its basic financial statements to be in conformity with generally accepted accounting principles. (See the list that follows this paragraph and Illustrations 9-3 through 9-8 and Illustrations A2-1 through A2-9 of the Reck, Lowensohn and Wilson textbook for examples of these statements.) We recommend that you use Excel or other spreadsheet software to prepare these financial statements; however, your instructor may require that they be prepared manually. Since the Water Utility Fund is the only fund in the proprietary funds category, you may reprint the statement of net position, statement of revenues, expenses, and changes in net position and the statement of cash flows prepared for the Water Utility Fund as the required statements for the proprietary fund basic financial statements, with suitable change in the titles of the statements, to meet the requirement of all proprietary type funds and Business-type Activities in the government-wide financial statements. Finally, The City of Bingham is a primary government and has no other organizations for which it is accountable as component units. Government-wide Financial Statements 1. Statement of net position 2. Statement of activities Fund Financial Statements 1. Balance sheetgovernmental funds (with reconciliation of this statement to the government-wide statement of activities) 2. Statement of revenues, expenditures, and changes in fund balances governmental funds (with reconciliation of this statement to the governmentwide statement of activities) 3. Statement of net positionproprietary funds 4. Statement of revenues, expenses, and changes in fund net positionproprietary funds 5. Statement of cash flowsproprietary funds