7–C. Part 2. Pension Trust Fund Transactions The City of Monroe Police Departmen
ID: 2449338 • Letter: 7
Question
7–C. Part 2. Pension Trust Fund Transactions
The City of Monroe Police Department pension plan, a single-employer, defined-benefit plan, reported the following account balances as of January 1, 2015:
Debits
Credits
Cash
$140,000
Accrued Interest Receivable
72,000
Investments: Bonds
5,300,000
Investments: Common Stock
2,790,000
Accounts Payable
$27,000
Net Assets Held in Trust for Employee Benefits
8,275,000
Totals
$ 8,302,000
$8,302,000
Required:
a. Open a general journal for the City of Monroe Police Department Pension Trust Fund and record the following transactions for the year ending December 31, 2015:
(1) Member contributions were received in the amount of $400,000. The City General Fund contributed the same amount.
(2) Interest was received in the amount of $386,900, including the accrued interest receivable at the beginning of the year. The interest accrual at year end amounted to $86,000.
(3) During the year, common stock dividends amounted to $125,000.
(4) Investments were made during the year in common stock in the amount of $575,000.
(5) Annuity benefits in the amount of $377,400, disability benefits of $ 82,020 and refunds to nonvested terminated employees of $39,800 were recorded as liabilities.
(6) Accounts payable, in the amount of $507,500, were paid in cash.
(7) During the year, common stock valued at $505,000 was sold for $506,800. A portion of these funds, $502,000 were invested in common stock of a different company.
(8) At year-end, the market value of investments in bonds increased by $12,750; the market value of investments in stocks decreased by $5,770.
b. Post the entries to the Police Department Pension Trust ledger (t-accounts).
c. Prepare and post an entry closing all nominal accounts to Net Assets.
7–C. Part 3. Fiduciary Fund Financial Statements
Required: Using the balances from Parts 1 and 2 prepare the following:
Statement of Changes in Fiduciary Net Assets
Statement of Fiduciary Net Assets
Debits
Credits
Cash
$140,000
Accrued Interest Receivable
72,000
Investments: Bonds
5,300,000
Investments: Common Stock
2,790,000
Accounts Payable
$27,000
Net Assets Held in Trust for Employee Benefits
8,275,000
Totals
$ 8,302,000
$8,302,000
Explanation / Answer
7-C PART 2
(a)
JOURNAL ENTRIES
CITY OF MONROE POLICE DEPARTMENT PENSION TRUST FUND
FOR THE YEAR ENDIN DEC 31,2015
PARTICULARS DEBIT($) CREDIT($) 1. CASH A/C DR 8,00,000 TO MEMBERS CONTRIBUTION A/C 4,00,000 TO CITY GENERAL FUND A/C 4,00,000 (BEING CONTRIBUTION RECEIVED) 2. CASH A/C DR 3,86,900 TO INTEREST A/C 3,14,900 TO ACCRUED INTEREST A/C 72,000 (BEING INTEREST RECEIVED) ACCRUED INTEREST A/C DR 86,000 TO INTEREST A/C 86,000 (BEING INTEREST ACCRUED) 3. CASH A/C DR 1,25,000 TO DIVIDEND A/C 1,25,000 (BEING DIVIDEND RECEIVED ON COMMON STOCK) 4. INVESTMENT IN COMMON STOCK A/C DR 5,75,000 TO CASH A/C 5,75,000 (BEING AMOUNT INVESTED IN COMMON STOCK) 5. ANNUITY BENEFIT A/C DR 3,77,400 DISABILITY BENEFIT A/C DR 82,020 REFUND TO NON VESTED TERMINATED EMPLOYEES A/C DR 39,800 TO ANNUTY BENEFIT PAYABLE A/C 3,77,400 TO DISABILITY BENEFIT PAYABLE A/C 82,020 TO REFUND TO NON VESTED TERMINATED EMPLOYEES PAYABLE A/C 39,800 (BEING LIABILITIES RECORDED) 6. ACCOUNTS PAYABLE A/C DR 5,07,500 TO CASH A/C 5,07,500 (BEING ACCOUNTS PAYABLE PAID) 7. CASH A/C DR 5,06,800 TO INVESTMENT IN COMMON STOCK A/C 5,05,000 TO PROFIT ON SALE OF COMMON STOCK A/C 1,800 (BEING INVESTMENT IN COMMON STOCK SOLD) INVESTMENT IN COMMON STOCK A/C DR 5,02,000 TO CASH A/C 5,02,000 (BING AMOUNT INVESTED IN A DIFFERENT COMMON STOCK) 8. INVESTMENT IN BONDS A/C DR 12,750 TO INVESTMENT IN COMMON STOCK A/C 5,770 TO PROFIT AND LOSS A/C 6,980 (BEING INVESTMENTS RECORDED AT MARKET VALUE)Related Questions
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