Pinnacle County operates an Investment Trust Fund for cities located in the county. The following transactions and events are associated with the fund during 2022. 1. The cities of Clarksville and Kingsville contributed assets of $112,500 and $75,000, respectively. 2. The entire amount received in the previous transaction was invested: $97,500 in certificates of deposit (CDs) and $90,000 in Treasury notes. 3. Interest income of $56,250 was received. 4. CDs totaling $60,000 and Treasury notes totaling $45,000 matured. Interest income of $1,500 was also received. 5. The money received in the previous transaction was reinvested in CDs. 6. Additional interest income was received: $26,250 7. The General Fund charged the Investment Trust Fund $750 for investment costs. This amount was paid in cash. 8. Total income of $75,000 was distributed to the participating cities according to the trust agreement. a) Prepare journal entries to record these transactions. If an entry affects more than one debit or credit account, enter the accounts in order of magnitude (largest to smallest balances), debits first. Account Debit Credit Cash 187,500 0 Additions contributions from Clarksville 0 112,500 Additions-contributions from Kingsville 0 75,000 To record contributions from Clarksville and Kingsville. Investments-certificates of deposit 97,500 0 Investments-Treasury notes 90,000 0 Cash 0 187,500 To record purchase of investments. Cash 56,250 0 Additions-interest 0 56,250 To record receipt of interest income. Cash 106,500 0 Investments-certificates of deposit 0 60,000 Investments-Treasury notes 0 45,000 Additions-interest 0 1,500 To record redemption of CDs and Treasury notes. Investments-certificates of deposit 106,500 0 Cash 0 106,500 To record reinvestment in CDs. Cash 26,250 0 Additions-interest 0 26,250 To record receipt of interest income. Deductions-investment expenses 750 0 Cash 0 750 V To record investment expenses. Deductions-distributions to pool participants 75,000 0 Cash 0 75,000 To record distributions to participants. b) Prepare a statement of changes in fiduciary net position for the fund for the year ending December 31, 2022. (Assume that the Investment Trust Fund began this year.) Enter addition and deduction accounts in order of magnitude (largest to smallest). Pinnacle County Investment Trust Fund Statement of Changes in Fiduciary Net Position For the Year Ending December 31, 2022 Additions: Contributions from participating governments - 187,500 Investment earnings: Interest income $ 76,500 $ Investment costs 750 Net investment income 75,750 263,250 Total additions 75,000 Deductions: Distributions to participating governments Interest income Net position-beginning of year Net position-end of year 0 187,500 188,250 $ C) Prepare a statement of fiduciary net position for the fund as December 31, 2022. Pinnacle County Investment Trust Fund Statement of Fiduciary Net Position December 31, 2022 Assets: 0 Cash Investments in certificates of deposit Investments in treasury notes 0 - 45,000 Total assets $ 0 Net position: Net increase in fiduciary net position $ 188,250
