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Topic
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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
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