Question

Baird County maintains an investment trust fund for the School District and the Town of Bairdville (separate governments). Presented below is the preclosing trial balance for the investment trust fund, a private-purpose trust fund.

Trial Balance—December 31, 2017	Debits			Credits
Accrued Interest Receivable	$	23,000
Cash		38,300
Deposits—School District				$	459,600
Deposits—Town of Bairdville					336,200
Decrease in Fair Value of Investments (bonds)		15,300
Interest Income					91,800
Investments—Corporate Bonds		1,576,000
Investments—U.S. Treasury Securities		1,530,000
Net Position held in trust—School District (Jan. 1)					1,530,000
Net Position held in trust—Town of Bairdville (Jan. 1)					765,000
	$	3,182,600		$	3,182,600

  
Investment earnings are distributed among the School District and Town in proportion to the amounts contributed (two-thirds to the School District and one-third to the Town).

Required:
Prepare the year-end closing entries and a Statement of Changes in Fiduciary Net Position for the year ended December 31, 2017.

Answer 1

Journal Entry :-

Particulars	Debit($)	Credit($)
Deposits from School Board A/c Dr.	459600
Deposits from Town of Bairdville A/c Dr.	336200
Interest income A/c Dr.	91800
To Decrease in fair value of investments A/c		15300
To Net Position held in trust - School District A/c		581533
To Net Position held in trust - Town of Bairdsville A/c		290767

Net Position held in trust - school district = $872300*2/3 = $581533

Net Position held in trust - Town of Bairdsville = $872300*1/3 = $290767

Statement of Charges :-

Particulars	Amount($)	Amount($)
Additions :-
Investment Earnings :
Interest Income	91800
Net Decrease in fair value of investments	(15300)
Total Earnings		76500
Deposits from other Governments :-
Deposits from School District	459600
Deposits from Town of Bairdsville	336200
Total Deposits		795800
Total Additions		872300
Deductions		0
Change in Net Position		872300
Add : Net Position Beginning Balance		2295000
Net Position Ending Balance		3167300