[titine]

Hi all, can anyone explain to me why this answer is the correct one? I thought the total asset should be $2,300,000?

McCallum County pools any excess cash from its governmental and Proprietary Funds and invests the monies in marketable securities. The County also permits other governmental entities within the county limits to invest their resources in the pool.

The market value of its investments at the beginning of the year was $2,000,000; with $1,500,000 of the investment attributable to County funds and the $500,000 balance attributable to other governmental entities. The market value at the end of the year was $2,200,000.

During the year, the county had received $100,000 in earnings on these investments. None of the earnings had been distributed, and no additions or withdrawals occurred during the year.

What amount should McCallum report as total assets in its Investment Trust Fund?

A. $2,300,000

B. $2,100,000

C. $575,000

The County reports the $500,000 in resources contributed by external entities plus both the $50,000 in unrealized appreciation on the investments ($200,000 total increase x 25% of the total assets invested in the pool, which are attributable to external entities) and the $25,000 in investment earnings ($100,000 total increase x 25% of total assets invested in the pool, which are attributable to external entities) in its Investment Trust Fund.

D. $525,000

Thanks in advance!

[titine]

Anyone?

[titine]

Anyone?

[sbruce810]

Here you go.

First you need to identify the portion of the investments that the county acts as a trustee. The balance is 500,000 attributable to other governmental entities. That is your beginning value. Next, you need to consider the increase in the market value. Since the Investment Trust Fund is 25% of the pool (500,000/2,000,000) you need to allocate 25% of the increase in market value to the trust, or 50,000. Then you need to allocate 25% of the 100,000 earnings to the Trust, an additional 25,000. When you total everything up (500,000 + 50,000 + 25,000) the total assets to report at the end of the period stand at 575,000. Hope this helps.

AUD - Passed
BEC - Passed
FAR - Passed
REG - Passed

Done

[sbruce810]

Here you go.

First you need to identify the portion of the investments that the county acts as a trustee. The balance is 500,000 attributable to other governmental entities. That is your beginning value. Next, you need to consider the increase in the market value. Since the Investment Trust Fund is 25% of the pool (500,000/2,000,000) you need to allocate 25% of the increase in market value to the trust, or 50,000. Then you need to allocate 25% of the 100,000 earnings to the Trust, an additional 25,000. When you total everything up (500,000 + 50,000 + 25,000) the total assets to report at the end of the period stand at 575,000. Hope this helps.

AUD - Passed
BEC - Passed
FAR - Passed
REG - Passed

Done

[calicpa]

where is the rest reported in?

BEC - 84, 4/6/13
AUD - 77, 5/28/13
REG - 83, 4/12/14
FAR - 83, 10/3/13

Ethics - 90% 4/24/13

150 unit education requirement met!
Work experience met!

[calicpa]

where is the rest reported in?

BEC - 84, 4/6/13
AUD - 77, 5/28/13
REG - 83, 4/12/14
FAR - 83, 10/3/13

Ethics - 90% 4/24/13

150 unit education requirement met!
Work experience met!

[Author]

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