ACCT 428 HW 7

7-5. Presented below is the pre-closing trial balance for the Scholarship Fund, a private-
purpose trust of the Algonquin District.
Trial balance- December 31, 2017 Debits Credits
Accounts Payable 2,500
Accrued Interest Receivable 1,010
Administrative Expense 5,990
Cash 52,000
Increase in Fair Value of Investments 4,500
Distribution – Scholarships 62,000
Interest Income 71,900
Investment in Bonds 1,214,000
Net Position – Restriction for Scholarship 1,256,100
1,335,000 1,335,000
Prepare the year-end closing entries and a statement of changes in fiduciary net position for the
year ended December 31, 2017.
Algonquin school district
Scholarship trust fund
General journal
Fiscal year 2017
Additions-investment earnings-interest
Deductions-investment earnings-net 71900
Decrease in fair value of investment (4500)
Deductions-administrative 5990
Deductions-distributions of scholarship 62000
Net assets held in trust for scholarship 8410
 ACCT 428 HW 7

Algonquin school district

Scholarship trust fund
For the year ended December 31, 2017
Additions
Investment earnings:
Interest income 71900
Net decrease in fair value of investments 4500
Total additions 76400
Deductions
Administrative expenses 5990
Distribution of scholarship profit organizations 62000
Total deductions 67990
Change in net assets 8410
Net assets-beginning 1256100
Net assets-ending 1264510

7-11. With regard to current GASB standards for pension reporting, do the following:
a. Distinguish between (1) defined contribution plans and (2) define benefit plans.
1. A defined contribution plan is a plan where there are limited benefits to the
contributions made by employees plus their invested income. Also no amount of
benefits are guaranteed but the amount of payments is determined by the
contributions that are made.
2. A defined benefit plan is one where you’re required to pay a certain sum based on
average earnings.
b. Distinguish between (1) agent and (2) cost-sharing multiemployer plans
1. Agent multiemployer plans is where separate accounts are kept for each
employer, they require a contribution by the employer to be recorded throughout
the year.
2. Cost-sharing multiemployer plans is where accounts are not kept for each
employer, because of this it is not possible to compute the different balances for
each different employer.
c. Define the following terms: (1) plan fiduciary net position and (2) net pension
liability.
 ACCT 428 HW 7

1. Fiduciary net position is assets plus deferred outflows minus liabilities minus
deferred inflows of resources.
2. Net pension liability is the difference between the total pension liability and the
net position of the pension fund reported in the statement of fiduciary net positon.