Chapter 08 - Accounting for Fiduciary ActivitiesAgency and Trust Funds

CHAPTER 8:

ACCOUNTING FOR FIDUCIARY ACTIVITIES

AGENCY AND TRUST FUNDS

8-18. a.

SUNCOAST COUNTY
TAX AGENCY FUND
GENERAL JOURNAL
Debits

1.

AND GOVERNMENTSCURRENT

24,843,000

DUE TO OTHER FUNDS AND GOVERNMENTS

2.

Credits

TAXES RECEIVABLE FOR OTHER FUNDS

CASH

24,843,000
13,700,000

TAXES RECEIVABLE FOR OTHER FUNDS

AND GOVERNMENTSCURRENT
3.

DUE TO OTHER FUNDS AND GOVERNMENTS

13,700,000
13,700,000

DUE TO COUNTY GENERAL FUND

5,818,294

DUE TO TOWN OF BAYSHORE

2,629,046

DUE TO SUNCOAST COUNTY CONSOLIDATED

SCHOOL DISTRICT

3,557,903

DUE TO VARIOUS TOWNS

Shares:

1,694,757

COMPUTATION

County
Bayshore
School
Towns

Taxes
Collected
10,333,000/24,843,000 * 13,700,000 = 5,698,269
4,840,000/24,843,000 * 13,700,000 = 2,669,082
6,550,000/24,843,000 * 13,700,000 = 3,612,084
3,120,000/24,843,000 * 13,700,000 = 1,720,565

1.5% Fee Agency's

Liability
+ 120,025 5,818,294
- 40,036 2,629,046
- 54,181 3,557,903
- 25,808 1,694,757

Debits
4.

DUE TO COUNTY GENERAL FUND

5,818,294

DUE TO TOWN OF BAYSHORE

2,629,046

DUE TO SUNCOAST COUNTY CONSOLIDATED

SCHOOL DISTRICT

3,557,903

DUE TO VARIOUS TOWNS

1,694,757

8-1

Credits

Chapter 08 - Accounting for Fiduciary ActivitiesAgency and Trust Funds

CASH

13,700,000

Ch. 8, Solutions, 8-18 (Cont'd)

b.

1.

SUNCOAST COUNTY
GENERAL FUND
GENERAL JOURNAL
Debits
10,333,000

TAXES RECEIVABLECURRENT

ESTIMATED UNCOLLECTIBLE CURRENT TAXES

413,320

REVENUES
4.

9,919,680

CASH

5,818,294

TAXES RECEIVABLECURRENT

5,698,269

REVENUES (COLLECTION FEES)

120,025

c.

1.

TOWN OF BAYSHORE
GENERAL FUND
GENERAL JOURNAL
TAXES RECEIVABLECURRENT

4,840,000

ESTIMATED UNCOLLECTIBLE CURRENT TAXES

96,800

REVENUES
4.

4,743,200

CASH

2,629,046

EXPENDITURES (COLLECTION FEES)

40,036

TAXES RECEIVABLECURRENT
d.

Credits

2,669,082

The tax agency fund can prepare a statement of tax agency fund net position
reflecting the asset and liability balances of the fund. Additionally, the fund would
be combined with any other agency funds that Suncoast County has and the total
of the assets and liabilities for the agency funds would be shown in a single
agency fund column on the statement of fiduciary net position.

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Chapter 08 - Accounting for Fiduciary ActivitiesAgency and Trust Funds

Ch. 8, Solutions, 8-18 (Cont'd)

General Problem Information: Tax agency fund

Learning Objective: 8-4
Topic: Tax Agency Funds
Blooms 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 no
legal obligation, the GASB standards indicate the services should be accounted
for using an agency fund.

b.

1.

LOCAL IMPROVEMENT DISTRICT FUND

GENERAL JOURNAL

ASSESSMENTS RECEIVABLECURRENT
ASSESSMENTS RECEIVABLENONCURRENT

Debits
500,000

Credits

4,500,000

DUE TO SPECIAL ASSESSMENT

BONDHOLDERSPRINCIPAL
2.

5,000,000

CASH

750,000

ASSESSMENTS RECEIVABLECURRENT

500,000

DUE TO SPECIAL ASSESSMENT

BONDHOLDERSINTEREST

250,000

ASSESSMENTS RECEIVABLECURRENT
ASSESSMENTS RECEIVABLENONCURRENT

8-3

500,000
500,000

Chapter 08 - Accounting for Fiduciary ActivitiesAgency and Trust Funds

Ch. 8, Solutions, 8-19, b. 2. (Cont'd)

Debits
3.

Credits

DUE TO SPECIAL ASSESSMENT

BONDHOLDERSPRINCIPAL

500,000

DUE TO SPECIAL ASSESSMENT

BONDHOLDERSINTEREST

250,000

CASH
c.

750,000

Assets and liabilities of the special assessment agency fund would be combined
with other agency funds of the reporting entity and appear in a separate column
on the statement of fiduciary net position but will appear in no other basic
financial statements. If there are several agency funds, Foothills may opt to
provide a combining statement of agency funds in its CAFR. The combining
statement would display the assets and liabilities for each agency fund in a
separate column.

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 Foothills financial
statements; however, the notes to the financial statements should disclose the
amount of the debt, as well as the fact that the government is in no way liable for
repayment but is only acting as an agent for the property owners in collecting the
assessments, forwarding the collections to bondholders, and initiating foreclosure
proceedings, if appropriate.
General Problem Information: Special Assessment Agency Fund
Learning Objective: 8-4
Topic: Agency Fund for Special Assessment Debt
Blooms Taxonomy: Apply
Accreditation Skills tag: AACSB: Knowledge Application, AICPA: Financial Reporting
Level of Difficulty: Medium

8-4

Chapter 08 - Accounting for Fiduciary ActivitiesAgency and Trust Funds

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.
b. Perpetual Care Fund. This describes a permanent fund as the principal
amount must be kept intact, but earnings of the fund can be used to provide
care for the citys own cemeteries.
c. Poudre River Public Library District. Because city management simply acts as
a custodian for the resources of the funds, this fund functions as an agency
fund, a fiduciary fund.
d. School Impact Fee Fund. Since the city is acting in a custodial capacity with
no discretion in the use or distribution of these resources, the fund is an
agency fund.
e. Cultural Services and Facilities. Since the resources are funds of the
government, the program primarily benefits the government, and the majority
of resources are provided on an ongoing basis from performing arts center
and museum fees, it should be accounted for as a special revenue fund.
f. Payroll Fund. Since payroll deductions are the assets of other
governments/organizations (e.g., federal government, state government,
pension funds), an agency fund is used to account for the deductions.
g. Telephone Commissions Fund. The city would use a special revenue fund,
since it primarily benefits from using the commissions to defray the costs
related to operation of the jail.
h. Block Grant Fund. Since the city is required to provide matching funds, the
grant would be reported in a special revenue fund.
i. Health Benefits Fund. This is a pension and other employee benefit trust
fund since the city is providing a retirement benefit to those outside of
government (employees).
Ch. 8, Solutions, 8-20 (Cont'd)

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Chapter 08 - Accounting for Fiduciary ActivitiesAgency and Trust Funds

j. Unclaimed Property Fund. Since the state is maintaining the property until
such time as a legal claimant can be found, a private-purpose trust fund
would be used. Until the property reverts to the state it is considered a
benefit to a party outside of government (the as yet unfound claimant).
General Problem Information: Identification of fiduciary funds
Learning Objective: 8-1
Learning Objective: 8-2
Topic: Agency Funds, Trust Funds
Blooms Taxonomy: Apply
Accreditation Skills tag: AACSB: Knowledge Application, AICPA: Critical Thinking
Level of Difficulty: Medium
8-22.
a.

EVERGREEN COUNTY
PASS-THROUGH AGENCY FUND
GENERAL JOURNAL

12/31/17

01/02/18

Debits
5,000,000

CASH
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

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

CASH
b.

Credits

5,000,000

Aspen Township Performing Arts Capital Projects Fund

CASH

1,400,000

REVENUES

1,400,000

Aspen Township Governmental Activities

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Chapter 08 - Accounting for Fiduciary ActivitiesAgency and Trust Funds

CASH

1,400,000

PROGRAM REVENUES CULTURE & RECREATION

CAPITAL GRANTS AND CONTRIBUTIONS
c.

1,400,000

Since the transactions are recorded in an agency fund, they would not be
reported on the government-wide financial statements. The balances in the fund
would be included in a separate column on the statement of fiduciary net
position, as required by GAAP. Since there is no net position, nothing would be
included in the statement of changes in fiduciary net position.
General Problem Information: Pass-through agency funds
Learning Objective: 8-4
Topic: Pass-through Agency Funds
Blooms Taxonomy: Apply
Accreditation Skills tag: AACSB: Knowledge Application, AICPA: Financial Reporting
Level of Difficulty: Hard

8-7