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, 2020Debits Credits Cash$15,000 Investments 544,000 Additions to permanent endowments $529,500 Investment income 67,500 Expenditures—subscriptions 52,500 Net increase in fair value of investments 14,500 Accrued interest receivable 5,250 Accounts payable 5,250 $616,750 $616,750 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). Journal entry worksheetRecord the closing entry to transfer revenue and expenditure to fund balance.Note: Enter debits before credits.Eventa.Record entryTotal AssetsRequired A Required BRequired CPrepare a balance sheet for the Library Permanent Fund (Use Restricted to SubEASTVILLE CITY LIBRARYLibrary Permanent FundTotal LiabilitiesGeneral JournalClear entryBalance SheetAs of December 31, 2020AssetsLiabilities, Deferred Inflows, and Fund BalancesLiabilitiesFund BalancesTotal Fund BalancesTotal Liabilities and Fund Balances$$00001DebitCreditView general journalRequired ARequired B Required CPrepare a statement of Revenues, Expenditures, and Changes iEASTVILLE CITY LIBRARYLibrary Permanent FundStatement of Revenues, Expenditures, andChanges in Fund BalanceFor the Year Ended December 31, 2020RevenuesInvestment Income:Total RevenuesExpendituresCurrent:Total ExpendituresNet Change in Fund BalanceFund Balance, January 1Fund Balance, December 31$000

The report on performance is an essential instrument for evaluating the sustainability and financial…

Answered: citizen group raised funds to establish…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

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	Debits		Credits
Cash	$	15,000
Investments		544,000
Additions to permanent endowments				$	529,500
Investment income					67,500
Expenditures—subscriptions		52,500
Net increase in fair value of investments					14,500
Accrued interest receivable		5,250
Accounts payable					5,250
	$	616,750		$	616,750

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).

Journal entry worksheet
Record the closing entry to transfer revenue and expenditure to fund balance.
Note: Enter debits before credits.
Event
a.
Record entry
Total Assets
Required A Required B
Required C
Prepare a balance sheet for the Library Permanent Fund (Use Restricted to Sub
EASTVILLE CITY LIBRARY
Library Permanent Fund
Total Liabilities
General Journal
Clear entry
Balance Sheet
As of December 31, 2020
Assets
Liabilities, Deferred Inflows, and Fund Balances
Liabilities
Fund Balances
Total Fund Balances
Total Liabilities and Fund Balances
$
$
0
0
0
0
1
Debit
Credit
View general journal
Required A
Required B Required C
Prepare a statement of Revenues, Expenditures, and Changes i
EASTVILLE CITY LIBRARY
Library Permanent Fund
Statement of Revenues, Expenditures, and
Changes in Fund Balance
For the Year Ended December 31, 2020
Revenues
Investment Income:
Total Revenues
Expenditures
Current:
Total Expenditures
Net Change in Fund Balance
Fund Balance, January 1
Fund Balance, December 31
$
0
0
0

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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