On July 1, 2016, the City of Belvedere accepted a gift of cash in the amount of $3,250,000 from a number of individuals and foundations and signed an agreement to establish a private-purpose trust. The $3,250,000 and any additional gifts are to be invested and retained as principal. Income from the trust is to be distributed to community nonprofit groups as directed by a Board consisting of city officials and other community leaders. The agreement provides that any increases in the market value of the principal investments are to be held in trust; if the investments fall below the gift amounts, then earnings are to be withheld until the principal amount is re-established.

1. On July 1, the original gift of cash was received.
2. On August 1, $2,195,000 in XYZ Company bonds were purchased at par plus accrued interest ($18,292). The bonds pay an annual rate of 5 percent interest semiannually on April 1 and October 1.
3. On August 2, $905,000 in ABC Company common stock was purchased. ABC normally declares and pays dividends semiannually, on January 31 and July 31.
4. On October 1, the first semiannual interest payment ($54,875) was received from XYZ Company. Note that part of this is for accrued interest due at the time of purchase; the remaining part is an addition that may be used for distribution.
5. On January 31, a cash dividend was received from ABC Company in the amount of $25,000.
6. On March 1, the ABC stock was sold for $921,000. On the same day, DEF Company stock was purchased for $969,000.
7. On April 1, the second semiannual interest payment was received from XYZ Company.
8. During the month of June, distributions were approved by the Board and paid in cash in the amount of $82,900.
9. Administrative expenses were recorded and paid in the amount of $5,900.
10. An accrual for interest on the XYZ bonds was made as of June 30, 2017.
11. As of June 30, 2017, the fair value of the XYZ bonds, exclusive of accrued interest, was determined to be $2,198,000. The fair value of the DEF stock was determined to be $963,000.
12. Closing entries were prepared.

The above events and transactions occurred during the fiscal year ended June 30, 2017. Required: a. Record Journal Entry in the Belvedere Community Trust Fund. b. Prepare (1) a Statement of Changes in Fiduciary Net Position for the Belvedere Community Trust Fund and (2) a Statement of Fiduciary Net Position.

A.

B.

No Transaction Credit General Journal Cash AdditionsContributions Debit 3,250,000 3,250,000 02 Investment in XYZ Company Bonds Accrued Interest Receivable Cash 2,195,000 27,438 2,222,438 X 905,000 Investment in ABC Company Stock Cash 905,000 04 54.875 Cash Accrued Interest Receivable AdditionsInvestment Earnings-Interest 25,000 921,000 00 000 05 12,500 X Cash AdditionsInvestment Earnings-Dividends 12,500 X 6a 921,000 Cash Investment in ABC Company Stock 905,000 921,000 Cash Investment in ABC Company Stock AdditionsInvestment Earnings-Net Increase(decrease) in Fa 905,000 16,000 6b 969,000 Investment in DEF Company Stock Cash 969,000 07 54,875 Cash AdditionsInvestment EarningsInterest 54,875 08 DeductionsDistribution to Community Nonprofit Organizations 82,900 Cash 82,900 09 5,900 Deductions-Administrative Expenses Cash 5,900 27,438 Accrued Interest Receivable AdditionsInvestment Earnings-Interest 27,438 Investment in XYZ Company Bonds AdditionsInvestment EarningsNet Increase(decrease) in Fairul Investment in DEF Company Stock 2,000 3,000 5,000 > 3,250,000 109,750 12,500 AdditionsContributions Additions-Investment EarningsInterest AdditionsInvestment EarningsDividends AdditionsInvestment Earnings-Net Increase(decrease) in Fair Deductions-Administrative Expenses Deductions-Distribution to Community Nonprofit Organizations -3,000 5,900 82,900 3,280,450 Fiduciary Net Position: Restricted for Community Nonprofit Orga Statement of Changes in Fiduciary Net Position Community Trust Fund For the Year Ended June 30, 2017 Additions: Contributions Investment Earnings: Interest Income $ 109,750 x Dividend Income 12,500 X (3,000) $ 3,250,000 119,250 3,369,250 Total Investment Earnings Total Additions Deductions: Administrative Expenses Distribution to Community Nonprofit Organizations 5,900 82,900 88,800 3,280,450 Total Deductions Change in Fiduciary Net position Fiduciary Net positionBeginning Fiduciary Net positionEnding 0 $ 3,280,450 CITY OF BELVEDERE Statement of Fiduciary Net Position Community Trust Fund As of June 30, 2017 Assets: Cash Accrued Interest Receivable $ 153,012 X 27,438 Investments, at Fair Value: XYZ Company Bonds DEF Company Stock 2,195,000 905,000 3,100,000 $ 3,280,450 Total Investments Total Assets Liabilities: Fiduciary Net position: $ 3,280,450 No Transaction Credit General Journal Cash AdditionsContributions Debit 3,250,000 3,250,000 02 Investment in XYZ Company Bonds Accrued Interest Receivable Cash 2,195,000 27,438 2,222,438 X 905,000 Investment in ABC Company Stock Cash 905,000 04 54.875 Cash Accrued Interest Receivable AdditionsInvestment Earnings-Interest 25,000 921,000 00 000 05 12,500 X Cash AdditionsInvestment Earnings-Dividends 12,500 X 6a 921,000 Cash Investment in ABC Company Stock 905,000 921,000 Cash Investment in ABC Company Stock AdditionsInvestment Earnings-Net Increase(decrease) in Fa 905,000 16,000 6b 969,000 Investment in DEF Company Stock Cash 969,000 07 54,875 Cash AdditionsInvestment EarningsInterest 54,875 08 DeductionsDistribution to Community Nonprofit Organizations 82,900 Cash 82,900 09 5,900 Deductions-Administrative Expenses Cash 5,900 27,438 Accrued Interest Receivable AdditionsInvestment Earnings-Interest 27,438 Investment in XYZ Company Bonds AdditionsInvestment EarningsNet Increase(decrease) in Fairul Investment in DEF Company Stock 2,000 3,000 5,000 > 3,250,000 109,750 12,500 AdditionsContributions Additions-Investment EarningsInterest AdditionsInvestment EarningsDividends AdditionsInvestment Earnings-Net Increase(decrease) in Fair Deductions-Administrative Expenses Deductions-Distribution to Community Nonprofit Organizations -3,000 5,900 82,900 3,280,450 Fiduciary Net Position: Restricted for Community Nonprofit Orga Statement of Changes in Fiduciary Net Position Community Trust Fund For the Year Ended June 30, 2017 Additions: Contributions Investment Earnings: Interest Income $ 109,750 x Dividend Income 12,500 X (3,000) $ 3,250,000 119,250 3,369,250 Total Investment Earnings Total Additions Deductions: Administrative Expenses Distribution to Community Nonprofit Organizations 5,900 82,900 88,800 3,280,450 Total Deductions Change in Fiduciary Net position Fiduciary Net positionBeginning Fiduciary Net positionEnding 0 $ 3,280,450 CITY OF BELVEDERE Statement of Fiduciary Net Position Community Trust Fund As of June 30, 2017 Assets: Cash Accrued Interest Receivable $ 153,012 X 27,438 Investments, at Fair Value: XYZ Company Bonds DEF Company Stock 2,195,000 905,000 3,100,000 $ 3,280,450 Total Investments Total Assets Liabilities: Fiduciary Net position: $ 3,280,450