Exercise 11-8
Southeastern College began the year with endowment investments of $1,240,000 and $730,000 of restricted cash designated by a donor for capital additions.
1- During the year an additional $504,000 donation was received for capital additions. These funds, together with those contributed in the prior year, were used to purchase 150 acres of land adjacent to the university.
2- An alum contributed $240,000 to the permanent endowment and pledged to provide an additional $460,000 early next year. The cash was immediately invested.
3- By terms of the endowment agreement, interest and dividends received on the investments are restricted for scholarships. Gains or losses from changes in the fair value of the investments, however, are not distributed but remain in the endowment. During the year, $53,000 of interest and dividends were received on endowment investments.
4-At year-end, the fair value of the investments had increased by $7,300.
Required:
Prepare journal entries to record the above transactions assuming:
a. Southeastern College is a public university.
b. Southeastern College is a private university.
Exercise 11-8
Southeastern College began the year with endowment investments of $1,240,000 and $730,000 of restricted cash designated by a donor for capital additions.
1- During the year an additional $504,000 donation was received for capital additions. These funds, together with those contributed in the prior year, were used to purchase 150 acres of land adjacent to the university.
2- An alum contributed $240,000 to the permanent endowment and pledged to provide an additional $460,000 early next year. The cash was immediately invested.
3- By terms of the endowment agreement, interest and dividends received on the investments are restricted for scholarships. Gains or losses from changes in the fair value of the investments, however, are not distributed but remain in the endowment. During the year, $53,000 of interest and dividends were received on endowment investments.
4-At year-end, the fair value of the investments had increased by $7,300.
Required:
Prepare journal entries to record the above transactions assuming:
a. Southeastern College is a public university.
b. Southeastern College is a private university.
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Related questions
Would it be possible to get an answer to the below questions(with calculations so that I can understand how to get theanswers).
Net Assets and Employeesâ Retirement Fund
Complete the following activities and submit your answers toyour instructor in a Word document formatted to proper APAspecifications. Include any relevant supporting computations andexplanations.
Pension Trust Funds:
7-13:
Review the financial information pertaining to the City ofSweetwater in problem 7-13 on pages 220-221 of your text. Reviewthe transactions that occurred during the year ended June 30, 2015and complete the following:
a. Record the transactions on the books of theEmployeesâ Retirement Fund.
b. Prepare a Statement of Changes in Fiduciary NetPosition for the Employeesâ Retirement Fund for the Year Ended June30, 2015.
c. Prepare a Statement of Fiduciary Net Position for theEmployeesâ Retirement Fund as of June 30, 2015.
The City of Sweetwater maintains an Employeesâ Retirement Fund,a single-employer defined benefit plan that provides annuity anddisability benefits. The fund is financed by actuarially determinedcontributions from the cityâs General Fund and by contributionsfrom employees. Administration of the retirement fund is handled byGeneral Fund employees, and the retirement fund does not bear anyadministrative expenses. The Statement of Fiduciary Net Positionfor the Employeesâ Retirement Fund as of July 1, 2014, is shownhere:
CITY OF SWEETWATER Employeesâ Retirement Fund Statement of Fiduciary Net Position As of July 1, 2014 | |
Assets | |
Cash | $120,000 |
Accrued Interest Receivable | 65,000 |
Investments, at Fair Value: | |
Bonds | 4,500,000 |
Common Stocks | 1,300,000 |
Total Assets | 5,985,000 |
Liabilities | |
Accounts Payable and Accrued Expenses | 350,000 |
Fiduciary Net Position Restricted for Pensions | $5,635,000 |
During the year ended June 30, 2015, the following transactionsoccurred:
1. The interest receivable on investments was collected incash.
2. Member contributions in the amount of $250,000 were receivedin cash.
The cityâs General Fund also contributed $750,000 in cash.
3. Annuity benefits of $700,000 and disability benefits of$150,000 were recorded a liabilities.
4. Accounts payable and accrued expenses in the amount of$900,000 were paid in cash.
5. Interest income of $240,000 and dividends in the amount of$40,000 were received in cash. In addition, bond interest income of$60,000 was accrued at year-end.
6. Refunds of $133,000 were made in cash to terminated,nonvested participants.
7. Common stocks, carried at a fair value of $500,000, were soldfor $480,000. That $480,000, plus an additional $300,000, wasinvested in stocks.
8. At year-end, it was determined that the fair value of stocksheld by the pension plan had decreased by $40,000; the fair valueof bonds had increased by $35,000.
9. Nominal accounts for the year were closed.
a. Record the transactions on the books of theEmployeesâ Retirement Fund.
b. Prepare a Statement of Changes in Fiduciary NetPosition for the Employeesâ Retirement Fund for the Year Ended June30, 2015.
c. Prepare a Statement of Fiduciary Net Position for theEmployeesââ Retirement Fund as of June 30, 2015.