Investment trust question that i doesn't make sense

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    Topic
  • #184096
    tomq04
    Participant

    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?

    (wrong, but what I picked) A. $2,300,000

    This answer is incorrect because the County only includes resources contributed and earned by external entities in its Investment Trust Fund.

    B. $2,100,000

    (what software says is right)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

    Any help because the explanation doesn’t make a lick of sense to me, total assets seems like it should include everything, not just what other entities contributed.

    REG- (1) 76
    FAR- (2) 64, (5)74, (7)83 (Over achiever!)
    AUD- (3) 70, (4) 75
    BEC- (6) 75

Viewing 4 replies - 1 through 4 (of 4 total)
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  • #522222
    mla1169
    Participant

    Total assets would include everything, but that's not what the question is asking. It's asking for the investment trust fund, i.e. the monies it's holding in trust for other entities.

    FAR- 77
    AUD -49, 71, 84
    REG -56,75!
    BEC -75

    Massachusetts CPA (non reporting) since 3/12.

    #522267
    mla1169
    Participant

    Total assets would include everything, but that's not what the question is asking. It's asking for the investment trust fund, i.e. the monies it's holding in trust for other entities.

    FAR- 77
    AUD -49, 71, 84
    REG -56,75!
    BEC -75

    Massachusetts CPA (non reporting) since 3/12.

    #522224
    tomq04
    Participant

    I'll tell you what doesn't make sense, is my title to this post.

    REG- (1) 76
    FAR- (2) 64, (5)74, (7)83 (Over achiever!)
    AUD- (3) 70, (4) 75
    BEC- (6) 75

    #522269
    tomq04
    Participant

    I'll tell you what doesn't make sense, is my title to this post.

    REG- (1) 76
    FAR- (2) 64, (5)74, (7)83 (Over achiever!)
    AUD- (3) 70, (4) 75
    BEC- (6) 75

Viewing 4 replies - 1 through 4 (of 4 total)
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