Items 6 through 8 relate to the following information:

The city council of the City of Great Falls decided to pool the investments of its General Fund with those of Great Falls School District and Great Falls Township, each of which carried its investments at fair value as of the prior balance sheet date. All investments are revalued to current fair value at the date of the creation of the pool. At that date, the prior and current fair value of the investments of each of the participants were as follows:

Investments Prior Fair Value Current Fair Value General Fund $600,000 $ 590,000 Great Falls School District 3,600,000 3,640,000 Great Falls Township 1,800,000 1,770,000 Total $6,000,000 $6,000,000

6. At the date of the creation of the investment pool, each of the participants should

a. Debit its Fund Balance account and credit its Investments account for the prior fair value of the assets transferred to the pool.

b. Debit or credit its Investments account as needed to adjust its carrying value to current fair value. The offsetting entry in each fund should be to Fund Balance.

c. Debit Equity in Pooled Investments for the current fair value of investments pooled, credit Investments for the prior fair value of investments pooled, and credit or debit RevenuesChange in Fair Value of Investments for the difference.

d. Make a memorandum entry only.

7. One day after creation of the pool, the investments that had belonged to Great Falls Township were sold by the pool for $1,760,000.

a. The loss of $40,000 is borne by each participant in proportion to its equity in the pool.

b. The loss of $10,000 is considered to be a loss borne by Great Falls Township.

c. The loss of $40,000 is considered to be a loss borne by Great Falls Township.

d. The loss of $10,000 is borne by each participant in proportion to its equity in the pool.

8. One month after creation of the pool, earnings on pooled investments totaled $59,900. It was decided to distribute the earnings to the participants, rounding the distribution to the nearest dollar. The Great Falls School District should receive

a. $36,000.

b. $35,940.

c. $36,339.

d. $37,000.

Items 9 and 10 are based on the following information:

Fairview County contributes to and administers a single-employer defined benefit pension plan on behalf of its covered employees. The following information is available for the current year:

Current-year benefits $150,000 Actual amount contributed to the plan 145,000 Amortization of deferred amounts 2,500 Net annual change in amounts normally expected to be liquidated with expendable available financial resources 600 Interest on prior pension liabilities 1,250

9. If the above information was for the General Fund, the current-year pension expenditure would be equal to

a. $145,000.

b. $145,600.

c. $150,000.

d. $153,750.

10. If the above information was for a proprietary fund, the current-year pension expense would be equal to

a. $145,000.

b. $145,600.

c. $150,000.

d. $153,750.