A citizen group raised funds to establish an endowment for the Eastville City Library. Under the principal must be maintained, but the earnings of the fund are to be used to purchase database library. A preclosing trial balance of the library permanent fund follows: Trial Balance-December 31, 2020 Cash Investments Additions to permanent endowments Investment income Expenditures-subscriptions Net increase in fair value of investments Accrued interest receivable Accounts payable $ Debits 7,500 630,000 39,500 2,000 $ 679,000 Credits $ 625,000 48,000 5,000 1,000 $ 679,000
A citizen group raised funds to establish an endowment for the Eastville City Library. Under the principal must be maintained, but the earnings of the fund are to be used to purchase database library. A preclosing trial balance of the library permanent fund follows: Trial Balance-December 31, 2020 Cash Investments Additions to permanent endowments Investment income Expenditures-subscriptions Net increase in fair value of investments Accrued interest receivable Accounts payable $ Debits 7,500 630,000 39,500 2,000 $ 679,000 Credits $ 625,000 48,000 5,000 1,000 $ 679,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![A citizen group raised funds to establish an endowment for the Eastville City Library. Under the terms of the trust agreement, the
principal must be maintained, but the earnings of the fund are to be used to purchase database and periodical subscriptions for the
library. A preclosing trial balance of the library permanent fund follows:
Trial Balance December 31, 2020
Cash
Investments
Additions to permanent endowments
Investment income
Expenditures-subscriptions
Net increase in fair value of investments
Accrued interest receivable
Accounts payable
Required A
Debits
Required B
7,500
630,000
Required C
39,500
2,000
Credits
$ 625,000
48,000
Required:
a. Prepare any closing entries necessary at year-end.
b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the library permanent fund.
c. Prepare a balance sheet for the Library Permanent Fund (Use Restricted to Subscriptions for any spendable fund balance).
Complete this question by entering your answers in the tabs below.
5,000
1,000
$ 679,000 $ 679,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Feeab1928-46dc-45cb-9701-79a1b5472751%2F3072e8f0-1893-43e8-bdfe-c37e6bd4c7f8%2Frewkz7k_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A citizen group raised funds to establish an endowment for the Eastville City Library. Under the terms of the trust agreement, the
principal must be maintained, but the earnings of the fund are to be used to purchase database and periodical subscriptions for the
library. A preclosing trial balance of the library permanent fund follows:
Trial Balance December 31, 2020
Cash
Investments
Additions to permanent endowments
Investment income
Expenditures-subscriptions
Net increase in fair value of investments
Accrued interest receivable
Accounts payable
Required A
Debits
Required B
7,500
630,000
Required C
39,500
2,000
Credits
$ 625,000
48,000
Required:
a. Prepare any closing entries necessary at year-end.
b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the library permanent fund.
c. Prepare a balance sheet for the Library Permanent Fund (Use Restricted to Subscriptions for any spendable fund balance).
Complete this question by entering your answers in the tabs below.
5,000
1,000
$ 679,000 $ 679,000
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