Exercise 7-13 (Algo)

The City of Sweetwater maintains an Employees Retirement Fund, a single-employer defined benefit plan that provides annuity and disability benefits. The fund is financed by actuarially determined contributions from the citys General Fund and by contributions from employees. Administration of the retirement fund is handled by General Fund employees, and the retirement fund does not bear any administrative expenses. The Statement of Fiduciary Net Position for the Employees Retirement Fund as of July 1, 2019, is shown here:

CITY OF SWEETWATER
Employees Retirement Fund
Statement of Fiduciary Net Position
As of July 1, 2019
Assets
Cash	$	137,000
Accrued Interest Receivable		57,800
Investments, at Fair Value:
Bonds		4,506,000
Common Stocks		1,307,000
Total Assets		6,007,800
Liabilities
Accounts Payable and Accrued Expenses		351,300
Fiduciary Net Position Restricted for Pensions	$	5,656,500

During the year ended June 30, 2020, the following transactions occurred:

1. The interest receivable on investments was collected in cash.
2. Member contributions in the amount of $276,100 were received in cash. The citys General Fund also contributed $808,000 in cash.
3. Annuity benefits of $734,000 and disability benefits of $164,000 were recorded as liabilities.
4. Accounts payable and accrued expenses in the amount of $956,000 were paid in cash.
5. Interest income of $242,000 and dividends in the amount of $34,100 were received in cash. In addition, bond interest income of $50,000 was accrued at year-end.
6. Refunds of $84,000 were made in cash to terminated, nonvested participants.
7. Common stocks, carried at a fair value of $506,000, were sold for $482,000. That $482,000, plus an additional $311,000, was invested in stocks.
8. At year-end, it was determined that the fair value of stocks held by the pension plan had decreased by $48,000; the fair value of bonds had increased by $40,000.
9. Nominal accounts for the year were closed.

Required: a. Record the transactions on the books of the Employees Retirement Fund. b. Prepare a Statement of Changes in Fiduciary Net Position for the Employees Retirement Fund for the year ended June 30, 2020. c. Prepare a Statement of Fiduciary Net Position for the Employees Retirement Fund as of June 30, 2020.

Record the transactions on the books of the Employees Retirement Fund. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

No	Transaction	General Journal	Debit	Credit
1	01	Cashselected answer correct	57,800selected answer correct	not attempted
		Accrued Interest Receivableselected answer correct	not attempted	57,800selected answer correct
2	02	Cashselected answer correct	1,084,100selected answer correct	not attempted
		AdditionsMember Contributionsselected answer correct	not attempted	276,100selected answer correct
		AdditionsEmployer Contributionsselected answer correct	not attempted	808,000selected answer correct
3	03	DeductionsAnnuity Benefitsselected answer correct	734,000selected answer correct	not attempted
		DeductionsDisability Benefitsselected answer correct	164,000selected answer correct	not attempted
		Accounts Payableselected answer correct	not attempted	904,000selected answer incorrect
4	04	Accounts Payableselected answer correct	956,000selected answer correct	not attempted
		Cashselected answer correct	not attempted	956,000selected answer correct
5	5a	Cashselected answer correct	276,100selected answer correct	not attempted
		Accrued Interest Receivableselected answer incorrect	not attempted	not attempted
		AdditionsInterest Incomeselected answer incorrect	not attempted	242,000selected answer incorrect
		AdditionsDividend Incomeselected answer correct	not attempted	34,100selected answer correct

CITY OF SWEETWATER
Employees' Retirement Fund
Statement of Changes in Fiduciary Net Position
For the Year Ended June 30, 2020
Additions
Contributions:
not attempted	not attempted
not attempted	not attempted
not attempted	not attempted
Total Contributions	0
Investment Earnings:
not attempted	not attempted
not attempted	not attempted
not attempted	not attempted
not attempted	not attempted
Total Additions	0
Deductions
not attempted	not attempted
not attempted	not attempted
not attempted	not attempted
not attempted	not attempted
Total Deductions	0
Change In Fiduciary Net Position	0
not attempted	not attempted
not attempted	$0

CITY OF SWEETWATER
Employees' Retirement Fund
Statement of Fiduciary Net Position
As of June 30, 2020
Assets
not attempted	not attempted
not attempted	not attempted
not attempted	not attempted
not attempted	not attempted
not attempted	not attempted
Total Assets	$0
Liabilities
not attempted	not attempted
not attempted	not attempted
Total Liabilities	$0
Fiduciary Net Position
not attempted	not attempted
not attempted	not attempted
Total Net Position	$0