In: Accounting
On July 1, 2016, the
City of Belvedere accepted a gift of cash in the amount of
$3,200,000 from a number of individuals and foundations and signed
an agreement to establish a private-purpose trust. The $3,200,000
and any additional gifts are to be invested and retained as
principal. Income from the trust is to be distributed to community
nonprofit groups as directed by a Board consisting of city
officials and other community leaders. The agreement provides that
any increases in the market value of the principal investments are
to be held in trust; if the investments fall below the gift
amounts, then earnings are to be withheld until the principal
amount is re-established.
Required:
a. The above events and transactions occurred during the
fiscal year ended June 30, 2017. Record them in the Belvedere
Community Trust Fund.
b. Prepare (1) a Statement of Changes in Fiduciary
Net Position for the Belvedere Community Trust Fund and (2) a
Statement of Fiduciary Net Position