7-16. A successful businessperson in the community has contacted the Moose County Board of Commissioners about donating income-producing securities to the County to support a particular activity. Under the agreement, the County would be required to maintain the principal amount of the gift but could use the resulting earnings. The following events occurred in 2024: 1. Securities, which had an original cost of $4,250,000, were donated to the County on January 1. The fair value of the securities at that date was $5,846,000, including • Corporate equities of $2,830,000. • Corporate bonds of $3,000,000. • Accrued interest receivable on the bonds of $16,000. 2. During the year, the fund received $180,000 in interest payments on the bonds. At the end of the year, accrued interest on the bonds totaled $16,500. 3. During the year, the fund received dividends on the corporate equities of $76,500. 4. During the year, the fund paid $222,000 supporting activities identified in the trust agreement and had outstanding bills to be paid of $6,000. 5. The fair value of the securities at December 31 was Corporate equities of $2,785,000. Corporate bonds of $3,060,000. Part 2: Assume it is appropriate to report the gift and related transactions in a private-purpose trust fund following the accrual basis. Using the Excel template provided a. Prepare journal entries recording the events above. b. Post the journal entries to T-accounts. c. Prepare closing entries. d. Prepare a Statement of Changes in Fiduciary Net Position and a Statement of Fiduciary Net Position.
7-16. A successful businessperson in the community has contacted the Moose County Board of Commissioners about donating income-producing securities to the County to support a particular activity. Under the agreement, the County would be required to maintain the principal amount of the gift but could use the resulting earnings. The following events occurred in 2024: 1. Securities, which had an original cost of $4,250,000, were donated to the County on January 1. The fair value of the securities at that date was $5,846,000, including • Corporate equities of $2,830,000. • Corporate bonds of $3,000,000. • Accrued interest receivable on the bonds of $16,000. 2. During the year, the fund received $180,000 in interest payments on the bonds. At the end of the year, accrued interest on the bonds totaled $16,500. 3. During the year, the fund received dividends on the corporate equities of $76,500. 4. During the year, the fund paid $222,000 supporting activities identified in the trust agreement and had outstanding bills to be paid of $6,000. 5. The fair value of the securities at December 31 was Corporate equities of $2,785,000. Corporate bonds of $3,060,000. Part 2: Assume it is appropriate to report the gift and related transactions in a private-purpose trust fund following the accrual basis. Using the Excel template provided a. Prepare journal entries recording the events above. b. Post the journal entries to T-accounts. c. Prepare closing entries. d. Prepare a Statement of Changes in Fiduciary Net Position and a Statement of Fiduciary Net Position.
Chapter20: Income Taxation Of Trusts And Estates
Section: Chapter Questions
Problem 9DQ
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Transcribed Image Text:7-16.
A successful businessperson in the community has contacted the Moose County Board of Commissioners
about donating income-producing securities to the County to support a particular activity. Under the
agreement, the County would be required to maintain the principal amount of the gift but could use the
resulting earnings. The following events occurred in 2024:
1. Securities, which had an original cost of $4,250,000, were donated to the County on January 1. The
fair value of the securities at that date was $5,846,000, including
•
Corporate equities of $2,830,000.
•
Corporate bonds of $3,000,000.
• Accrued interest receivable on the bonds of $16,000.
2. During the year, the fund received $180,000 in interest payments on the bonds. At the end of the
year, accrued interest on the bonds totaled $16,500.
3. During the year, the fund received dividends on the corporate equities of $76,500.
4. During the year, the fund paid $222,000 supporting activities identified in the trust agreement and
had outstanding bills to be paid of $6,000.
5. The fair value of the securities at December 31 was
Corporate equities of $2,785,000.
Corporate bonds of $3,060,000.
Transcribed Image Text:Part 2: Assume it is appropriate to report the gift and related transactions in a private-purpose trust
fund following the accrual basis. Using the Excel template provided
a. Prepare journal entries recording the events above.
b. Post the journal entries to T-accounts.
c. Prepare closing entries.
d. Prepare a Statement of Changes in Fiduciary Net Position and a Statement of Fiduciary Net
Position.
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