A citizen group raised funds to establish an endowment for the Eastville City Library. Under the terms of the trust agreement, the principal must be maintained, but the earnings of the fund are to be used to purchase database and periodical subscriptions for the library. A preclosing trial balance of the library permanent fund follows: Trial Balance—December 31, 2024 Debits Credits Cash $17,500 Investments 554,000 Additions to permanent endowments $537,000 Investment income 75,000 Expenditures—Library 57,500 Net increase in fair value of investments 17,000 Accrued interest receivable 6,500 Accounts payable 6,500 $635,500 $635,500 Required: Prepare any closing entries necessary at year-end. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the library permanent fund. Prepare a balance sheet for the Library Permanent Fund (Use Restricted to Library for any spendable fund balance).
A citizen group raised funds to establish an endowment for the Eastville City Library. Under the terms of the trust agreement, the principal must be maintained, but the earnings of the fund are to be used to purchase database and periodical subscriptions for the library. A preclosing trial balance of the library permanent fund follows: Trial Balance—December 31, 2024 Debits Credits Cash $17,500 Investments 554,000 Additions to permanent endowments $537,000 Investment income 75,000 Expenditures—Library 57,500 Net increase in fair value of investments 17,000 Accrued interest receivable 6,500 Accounts payable 6,500 $635,500 $635,500 Required: Prepare any closing entries necessary at year-end. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the library permanent fund. Prepare a balance sheet for the Library Permanent Fund (Use Restricted to Library for any spendable fund balance).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1.
A citizen group raised funds to establish an endowment for the Eastville City Library. Under the terms of the trust agreement, the principal must be maintained, but the earnings of the fund are to be used to purchase database and periodical subscriptions for the library. A preclosing
| Trial Balance—December 31, 2024 | Debits | Credits |
|---|---|---|
| Cash | $17,500 | |
| Investments | 554,000 | |
| Additions to permanent endowments | $537,000 | |
| Investment income | 75,000 | |
| Expenditures—Library | 57,500 | |
| Net increase in fair value of investments | 17,000 | |
| Accrued interest receivable | 6,500 | |
| Accounts payable | 6,500 | |
| $635,500 | $635,500 |
Required:
- Prepare any closing entries necessary at year-end.
- Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the library permanent fund.
- Prepare a balance sheet for the Library Permanent Fund (Use Restricted to Library for any spendable fund balance).
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