Chapter 08 – Accounting for Fiduciary Activities—Agency and Trust Funds
8–13
Ch. 8, Solutions, 8-18 (Cont’d)
General Problem Information: Tax agency fund
Learning Objective: 8-4
Topic: Tax Agency Funds
Bloom’s Taxonomy: Apply
Accreditation Skills tag: AACSB: Knowledge Application, AICPA: Financial
Reporting
Level of Difficulty: Medium
8-19.
a. Since the city is providing administrative services for debt for which it has
b. LOCAL IMPROVEMENT DISTRICT FUND
GENERAL JOURNAL
Debits Credits
1. ASSESSMENTS RECEIVABLE⎯CURRENT 500,000
2. CASH 750,000
ASSESSMENTS RECEIVABLE⎯CURRENT 500,000
Chapter 08 – Accounting for Fiduciary Activities—Agency and Trust Funds
8–14
Ch. 8, Solutions, 8-19, b. 2. (Cont’d)
Debits Credits
3. DUE TO SPECIAL ASSESSMENT
c. Assets and liabilities of the special assessment agency fund would be
combined with other agency funds of the reporting entity and appear in a
d. Since the City of Foothills is not obligated in any manner for the Green
Acres special assessment debt, the debt should not be reported in
General Problem Information: Special Assessment Agency Fund
Learning Objective: 8-4
Topic: Agency Fund for Special Assessment Debt
Bloom’s Taxonomy: Apply
Accreditation Skills tag: AACSB: Knowledge Application, AICPA: Financial
Reporting
Level of Difficulty: Medium
Chapter 08 – Accounting for Fiduciary Activities—Agency and Trust Funds
8–15
Ch. 8, Solutions (Cont’d)
8-20. Fiduciary funds are described in a, c, d, f, i, and j. See explanations for
each fund type below.
a. Tri-Centennial Fund. This is a private-purpose trust fund since the
resources will benefit a broad constituency rather than just the citizens
of the city.
Chapter 08 – Accounting for Fiduciary Activities—Agency and Trust Funds
8–16
Ch. 8, Solutions, 8-20 (Cont’d)
j. Unclaimed Property Fund. Since the state is maintaining the property
General Problem Information: Identification of fiduciary funds
Learning Objective: 8-1
Learning Objective: 8-2
Topic: Agency Funds, Trust Funds
Bloom’s Taxonomy: Apply
Accreditation Skills tag: AACSB: Knowledge Application, AICPA: Critical Thinking
Level of Difficulty: Medium
8-21. a. GENERAL JOURNAL
Debits Credits
CITY OF ALBERTVILLE GENERAL FUND:
ALBERTVILLE SCHOOLS:
EQUITY IN POOLED INVESTMENTS 4,230,000
RICHWOOD TOWNSHIP:
Chapter 08 – Accounting for Fiduciary Activities—Agency and Trust Funds
8–17
Ch. 8, Solutions, 8-21 (Cont’d)
Debits Credits
b. INVESTMENT POOL TRUST FUND:
1. U.S. TREASURY NOTES 900,000
CERTIFICATES OF DEPOSIT 8,100,000
2. U.S. TREASURY NOTES 30,000
DUE TO GENERAL FUND 3,000
ADDITIONS⎯INVESTMENT EARNINGS⎯
Chapter 08 – Accounting for Fiduciary Activities—Agency and Trust Funds
8–18
Ch. 8, Solutions, 8-21 (Cont’d)
Debits Credits
4. ACCRUED INTEREST RECEIVABLE 28,000
UNDISTRIBUTED EARNINGS ON
POOLED INVESTMENTS 28,000
5. UNDISTRIBUTED EARNINGS ON
COMPUTATION: City’s GF Schools Township TOTAL
EQUITY AT BEGINNING OF YEAR $900,000 $4,230,000 $3,870,000 $9,000,000
% INTEREST 10.00% 47.00% 43.00% 100.00%
c. CITY OF ALBERTVILLE GENERAL FUND:
Chapter 08 – Accounting for Fiduciary Activities—Agency and Trust Funds
8–19
Ch. 8, Solutions, 8-21 (Cont’d)
Debits Credits
RICHWOOD TOWNSHIP:
d. CITY OF ALBERTVILLE GENERAL FUND:
ALBERTVILLE SCHOOLS:
RICHWOOD TOWNSHIP:
e. The investment trust fund would not report the General Fund’s interest in
the pool since the General Fund is an internal participant. The General Fund
Chapter 08 – Accounting for Fiduciary Activities—Agency and Trust Funds
8–20
Ch. 8, Solutions, 8-21 (Cont’d)
General Problem Information: Investment trust fund
Learning Objective: 8-5
Topic: Investment Pools
Bloom’s Taxonomy: Apply
Accreditation Skills tag: AACSB: Knowledge Application, AICPA: Financial
Reporting
Level of Difficulty: Hard
8-22.
a. EVERGREEN COUNTY
PASS-THROUGH AGENCY FUND
GENERAL JOURNAL
Debits Credits
12/31/17 CASH 5,000,000
DUE TO CITY OF BOULDER 2,100,000
DUE TO ASPEN TOWNSHIP 1,400,000
DUE TO SNOWTON 900,000
DUE TO FIRTREE VILLAGE 600,000
b. Aspen Township Performing Arts Capital Projects Fund
Aspen Township Governmental Activities
Chapter 08 – Accounting for Fiduciary Activities—Agency and Trust Funds
8–21
Ch. 8, Solutions, 8-22 (Cont’d)
c. Since the transactions are recorded in an agency fund, they would not be
reported on the government-wide financial statements. The balances in the
General Problem Information: Pass-through agency funds
Learning Objective: 8-4
Topic: “Pass–through” Agency Funds
Bloom’s Taxonomy: Apply
Accreditation Skills tag: AACSB: Knowledge Application, AICPA: Financial
Reporting
Level of Difficulty: Hard
8-23. Some of the errors noted include:
• Each type of fiduciary fund should be reported in a separate column.
Therefore, the trust funds column should be separated into two
columns, one for the investment trust and one for the private-
Chapter 08 – Accounting for Fiduciary Activities—Agency and Trust Funds
8–22
Ch. 8, Solutions, 8-23 (Cont’d)
• The agency funds would not report net position held in trust.
However, an agency fund must report the liability (Due to Other Units
General Problem Information: Fiduciary financial statements
Learning Objective: 8-1
Topic: Various chapter topics
Bloom’s Taxonomy: Apply
Accreditation Skills tag: AACSB: Knowledge application, AICPA: Critical thinking
Level of Difficulty: Hard
Chapter 08 – Accounting for Fiduciary Activities—Agency and Trust Funds
Ch. 8, Solutions (Cont’d)
8-24.
2017 2016 2015
Total pension liability
Service cost 123,225$ 125,440$ 127,950$
Interest 189,730 182,580 169,960
Differences between expected and actual experience 1,250 (850) 625
Benefit payments (including refunds of
employee contributions) (248,000) (231,580) (217,960)
Net change in total pension liability 66,205 75,590 80,575
Total pension liability, beginning 2,083,715 2,008,125 1,927,550
Total pension liability, ending 2,149,920 2,083,715 2,008,125
Plan fiduciary net position
Contributions—employee 32,450$ 36,240$ 30,170$
Contributions—employer 98,620 102,530 91,550
Net investment income 18,990 (12,380) (21,510)
Benefit payments (including refunds of
employee contributions) (64,500) (42,780) (51,330)
Administrative expenses (3,290) (3,110) (2,840)
Net change in plan fiduciary net position 82,270 80,500 46,040
Plan fiduciary net position, beginning 1,138,220 1,057,720 1,011,680
Plan fiduciary net position, ending 1,220,490 1,138,220 1,057,720
Net pension liability, ending 929,430$ 945,495$ 950,405$
Plan fiduciary net position as a percentage
of total pension liability 56.77% 54.62% 52.67%
Covered-employee payroll 502,160$ 485,218$ 489,810$
BLUFF COUNTY EMPLOYEE RETIREMENT SYSTEM
SCHEDULE OF CHANGES IN THE COUNTY’S NET PENSION LIABILITY AND RELATED RATIOS
LAST 3 FISCAL YEARS
Chapter 08 – Accounting for Fiduciary Activities—Agency and Trust Funds
8–24
Ch. 8, Solutions, 8-24 (Cont’d)
(a) 66,205 – [123,225 + 1,250 – 248,000] = 189,730
(b) 2,083,715 + 66,205 = 2,149,920
(c) 32,450 + 98,620 + 18,990 – 64,500 – 3,290 = 82,270
(d) 1,220,490 – 82,270 = 1,138,220
General Problem Information: Pension calculations
Learning Objective: 8-5
Topic: Pension Trust Funds
Bloom’s Taxonomy: Apply
Accreditation Skills tag: AACSB: Knowledge application, AICPA: Critical thinking
Level of Difficulty: Hard