Q1. Heat Village maintains a Pension Trust Fund for its employees. At the start of the year, the Fund holds cash of $150,000 and investments that have a fair value of $4,000,000. The Fund has the following transactions. Prepare entries to record them in the Fund's accounts. (2 Marks)

a. Bills the General Fund $200,000 for the required annual contribution. The pension plan does not require contributions from the employees

b. Receives payment of $200,000 from the General Fund

c. Receives interest and dividend income of $150,000 in cash on its investment portfolio

d. Receives $215,000 from selling investments carried on the books at $200,000

e. Makes new investments totaling $275,000

f. Pays annuity benefits of $325,000 to retirees or their spouses

g. Pays administrative expenses of $100,000 in cash

h. The investments held by the Fund have a fair value of $4,100,000 at year-end.

Q2. Following information are related with Internal Service Fund of City of Jeddah. You are required to prepare a Statement of Cash Flows for the year ended December 31^st, 2018. (1.5 Marks)

	Amount ($)
Operating income	68,400
Increase in Inventories	27,200
Interest received	800
Acquisition of Capital Assets	2,800
Payment to Suppliers	32,000
Depreciation expense	29,600
Payments for Rent	21,200
Increase in Accounts Payable	54,400
Receipts from Customers	378,400
Payment to Employees	200,000
Cash balance at the beginning of the year	584,800

Answer:

Q3. The following transactions are related with a Township Debt Service Fund. Prepare journal entries to record the transactions in the Debt Service Fund. (1.5 Marks)

a. The Township levies a special property tax amounting to $1,750,000 to pay debt service on its long-term general obligation debt. The tax must be accounted for in the Debt Service Fund.

b. All the property taxes levied for debt service purposes are collected.

c. The Township invests $525,000 in a six-month certificate of deposit.

d. Debt service (interest of $350,000 and principal of $700,000) becomes due and payable.

e. The debt service liabilities are paid.

f. The certificate of deposit in c. matures and the Township receives a total of $535,500, which includes $10,500 of interest.

Answer: