The City of Sweetwater maintains an Employees’ Retirement Fund, a single-employer defined benefit plan that provides annuity and disability benefits. The fund is financed by actuarially determined contributions from the city’s General Fund and by contributions from employees. Administration of the retirement fund is handled by General Fund employees, and the retirement fund does not bear any administrative expenses. The Statement of Fiduciary Net Position for the Employees’ Retirement Fund as of July 1, 2019, is shown here: CITY OF SWEETWATER Employees’ Retirement Fund Statement of Fiduciary Net Position As of July 1, 2019 Assets Cash $ 137,000 Accrued Interest Receivable 57,800 Investments, at Fair Value: Bonds 4,506,000 Common Stocks 1,307,000 Total Assets 6,007,800 Liabilities Accounts Payable and Accrued Expenses 351,300 Fiduciary Net Position Restricted for Pensions $ 5,656,500 During the year ended June 30, 2020, the following transactions occurred: The interest receivable on investments was collected in cash. Member contributions in the amount of $276,100 were received in cash. The city’s General Fund also contributed $808,000 in cash. Annuity benefits of $734,000 and disability benefits of $164,000 were recorded as liabilities. Accounts payable and accrued expenses in the amount of $956,000 were paid in cash. Interest income of $242,000 and dividends in the amount of $34,100 were received in cash. In addition, bond interest income of $50,000 was accrued at year-end. Refunds of $84,000 were made in cash to terminated, nonvested participants. Common stocks, carried at a fair value of $506,000, were sold for $482,000. That $482,000, plus an additional $311,000, was invested in stocks. At year-end, it was determined that the fair value of stocks held by the pension plan had decreased by $48,000; the fair value of bonds had increased by $40,000. Nominal accounts for the year were closed. Required: a. Record the transactions on the books of the Employees’ Retirement Fund. b. Prepare a Statement of Changes in Fiduciary Net Position for the Employees’ Retirement Fund for the year ended June 30, 2020. c. Prepare a Statement of Fiduciary Net Position for the Employees’ Retirement Fund as of June 30, 2020.

The City of Sweetwater maintains an Employees’ Retirement Fund, a single-employer defined benefit plan that provides annuity and disability benefits. The fund is financed by actuarially determined contributions from the city’s General Fund and by contributions from employees. Administration of the retirement fund is handled by General Fund employees, and the retirement fund does not bear any administrative expenses. The Statement of Fiduciary Net Position for the Employees’ Retirement Fund as of July 1, 2019, is shown here: CITY OF SWEETWATER Employees’ Retirement Fund Statement of Fiduciary Net Position As of July 1, 2019 Assets Cash $ 137,000 Accrued Interest Receivable 57,800 Investments, at Fair Value: Bonds 4,506,000 Common Stocks 1,307,000 Total Assets 6,007,800 Liabilities Accounts Payable and Accrued Expenses 351,300 Fiduciary Net Position Restricted for Pensions $ 5,656,500 During the year ended June 30, 2020, the following transactions occurred: The interest receivable on investments was collected in cash. Member contributions in the amount of $276,100 were received in cash. The city’s General Fund also contributed $808,000 in cash. Annuity benefits of $734,000 and disability benefits of $164,000 were recorded as liabilities. Accounts payable and accrued expenses in the amount of $956,000 were paid in cash. Interest income of $242,000 and dividends in the amount of $34,100 were received in cash. In addition, bond interest income of $50,000 was accrued at year-end. Refunds of $84,000 were made in cash to terminated, nonvested participants. Common stocks, carried at a fair value of $506,000, were sold for $482,000. That $482,000, plus an additional $311,000, was invested in stocks. At year-end, it was determined that the fair value of stocks held by the pension plan had decreased by $48,000; the fair value of bonds had increased by $40,000. Nominal accounts for the year were closed. Required: a. Record the transactions on the books of the Employees’ Retirement Fund. b. Prepare a Statement of Changes in Fiduciary Net Position for the Employees’ Retirement Fund for the year ended June 30, 2020. c. Prepare a Statement of Fiduciary Net Position for the Employees’ Retirement Fund as of June 30, 2020.

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

CITY OF SWEETWATER
Employees’ Retirement Fund
Statement of Fiduciary Net Position
As of July 1, 2019
Assets
Cash	$	137,000
Accrued Interest Receivable		57,800
Investments, at Fair Value:
Bonds		4,506,000
Common Stocks		1,307,000
Total Assets		6,007,800
Liabilities
Accounts Payable and Accrued Expenses		351,300
Fiduciary Net Position Restricted for Pensions	$	5,656,500

During the year ended June 30, 2020, the following transactions occurred:

The interest receivable on investments was collected in cash.
Member contributions in the amount of $276,100 were received in cash. The city’s General Fund also contributed $808,000 in cash.
Annuity benefits of $734,000 and disability benefits of $164,000 were recorded as liabilities.
Accounts payable and accrued expenses in the amount of $956,000 were paid in cash.
Interest income of $242,000 and dividends in the amount of $34,100 were received in cash. In addition, bond interest income of $50,000 was accrued at year-end.
Refunds of $84,000 were made in cash to terminated, nonvested participants.
Common stocks, carried at a fair value of $506,000, were sold for $482,000. That $482,000, plus an additional $311,000, was invested in stocks.
At year-end, it was determined that the fair value of stocks held by the pension plan had decreased by $48,000; the fair value of bonds had increased by $40,000.
Nominal accounts for the year were closed.

Required:
a. Record the transactions on the books of the Employees’ Retirement Fund.
b. Prepare a Statement of Changes in Fiduciary Net Position for the Employees’ Retirement Fund for the year ended June 30, 2020.
c. Prepare a Statement of Fiduciary Net Position for the Employees’ Retirement Fund as of June 30, 2020.

Required A Required B Required C
Prepare a Statement of Changes in Fiduciary Net Position for the Employees' Retirement F
2020. (Amounts to be deducted should be indicated with a minus sign.)
Additions
Contributions:
Statement of Changes in Fiduciary Net Position
For the Year Ended June 30, 2020
Total Contributions
Investment Earnings:
CITY OF SWEETWATER
Employees' Retirement Fund
Total Additions
Deductions
Total Deductions
Change In Fiduciary Net Position
$
< Required A
0
0
0
Required C >
Required A
Prepare a Statement of Fiduciary Net Position for the Employees' Retirement Fund as of June 3
CITY OF SWEETWATER
Employees' Retirement Fund
Statement of Fiduciary Net Position
As of June 30, 2020
Assets
Total Assets
Total Liabilities
Required B Required C
Total Net Position
Liabilities
Fiduciary Net Position
S
S
$
< Required B
0
0
0
Required C >

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