Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The City of Sambaville received a gift of $1,800,000 from a local resident on April 1, 2017, and signed an agreement that the funds would

The City of Sambaville received a gift of $1,800,000 from a local resident on April 1, 2017, and signed an agreement that the funds would be invested permanently, and that the income would be used to maintain the city cemetery (through the Cemetery Perpetual Care Fund). The following transactions took place during the year ended December 31, 2017.

1. The gift was recorded on April 1.

2. On April 1, 2017, XYZ Company bonds were purchased in the amount of $1,750,000, at par. The bonds carry an annual interest rate of 5 percent, payable semiannually on October 1 and April 1.

3. On October 1, the semiannual interest was received.

4. From October 1 through December 1, payments were made totaling $17,200 to a lawn service.

5. On December 31, an accrual was made for interest.

6. Also, on December 31, a reading of the financial press indicated that XYZ bonds had a fair value of $1,745,500, exclusive of accrued interest.

7. The books were closed.

Required:

1. Record the transactions on the books of the Cemetery Perpetual Care Fund.

2. Prepare a separate Statement of Revenues, Expenditures, and Changes in Fund Balances for the Cemetery Perpetual Care Fund for the Year Ended December 31, 2017.

3. Prepare the Balance Sheet for the Cemetery Perpetual Care Fund for the year ended December 31, 2017.

Can you please answer this quesion using the amounts provided, not amounts from a different question.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing and Assurance Services An Applied Approach

Authors: Iris Stuart

1st edition

73404004, 978-0073404004

More Books

Students also viewed these Accounting questions