Accounting Case Study - Computation of the Following Journal Entries

a. Record the transactions on the books of the Employees Retirement Fund.

Solution: Computation of the Following Journal Entries

Particulars Debits Credits

1)

Cash A/c-----------------Dr $160,000

To Accrued Interest Receivable A/c $160,000

2)

Cash A/c-----------------Dr $1,160,000

To Additions-Contributions-Plan Members A/c $460,000

To Additions-Contributions-Employer A/c $700,000

3)

Deductions-Annuity Benefits A/c-----------------Dr $780,000

Deductions-Disability Benefits A/c-----------------Dr $200,000

To Accounts Payable and Accrued Expenses A/c $980,000

4)

Accounts Payable and Accrued Expenses A/c-----------------Dr $820,000

To Cash A/c $820,000

5)

Cash A/c-----------------Dr $380,000

To Additions-Investment Earnings-Interest A/c $320,000

To Additions-Investment Earnings-Dividends A/c $60,000

6)

Accrued Interest Receivable A/c-----------------Dr $160,000

To Additions-Investment Earnings-Interest A/c $160,000

7)

Deductions-Refunds to Terminated Employees A/c-----------------Dr $150,000

To Cash A/c $150,000

8)

Cash A/c----------------------Dr $472,000

Additions-Investment Earnings-Net Decrease in Fair Value of InvestmentsA/c----------------------Dr $28,000

To Investments in Common Stocks A/c $500,000

Investments in Common Stocks A/c-------------Dr $832,000

To Cash A/c $832,000

9)

Investments in Bonds A/c-----------------Dr $35,000

Additions-Investment Earnings-Net Decrease in Fair Value of Investments A/c-----------------Dr $25,000

To Investments in Common Stock A/c $60,000

10)

Additions-Contributions-Plan Members A/c-----------------Dr $460,000

Additions-Contributions-Employer A/c-----------------Dr $700,000

Additions-Investment Earnings-Interest A/c-----------------Dr $480,000

Additions-Investment Earnings-Dividends A/c-----------------Dr $60,000

To Additions-Investment Earnings-Net decrease in Fair Value of Investments A/c $53,000

To Deductions-Annuity Benefits A/c $780,000

To Deductions-Disability Benefits A/c $200,000

To Deductions-Refunds to Terminated Employees A/c $150,000

To Net Assets Held in Trust for Pension Benefits A/c $517,000

b. Prepare a Statement of Changes in Net Assets for the Employees Retirement Fund for the Year Ended June 30, 2012.

Solution: Computation of the Employees' Retirement Fund Statement Of Changes In Plan Net Assets

City of Shipley

Employees' Retirement Fund

Statement Of Changes In Plan Net Assets

For The Year Ended June 30, 2012

Particulars Debits Credits

Additions:

Contributions:

Employer