(Journal Entries for an Investment Trust Fund) Smith County ...

[chads108]

(Journal Entries for an Investment Trust Fund)
 
  Smith County operates an external investment pool, which invests idle cash on behalf of school districts within the county. Prepare journal entries to record the following transactions.
 
  a. The pool receives cash deposits from District 1 (100,000) and District 3 (300,000).
  b. The pool invests the 400,000 in certificates of deposit (CDs) maturing in three months.
  c. The CDs mature and the pool receives 402,000, which includes 2,000 interest.
  d. The pool remits the interest to Districts 1 and 3 in proportion to their investments.
  e. District 3 needs some cash. In accordance with District 3's request, the pool returns 250,000 cash to the District.
   f. The pool invests the remaining 150,000 in another CD.
   g. At year-end, interest earned but not received on the 150,000 CD, amounts to 1,000.

Question 2

Every controlling account must have its own
 a. revenue ledger
  b. general ledger
  c. subsidiary ledger
  d. journal

[bubulittle310@msn.cn]

Answer to Question 1

a. Cash 400,000
Additions  contributions from District 1 100,000
Additions  contributions from District 3 300,000

b. Investments - CDs 400,000
Cash 400,000

c. Cash 402,000
Investments - CDs 400,000
Additions - interest 2,000

d. Deductions - distributions to pool participants 2,000
Cash 2,000

e. Deductions - distributions to pool participants (District 3) 250,000
Cash 250,000

f. Investments - CDs 150,000
Cash 150,000

g. Interest receivable 1,000
Additions - interest 1,000

Answer to Question 2

c

[chads108]

Gracias!

[upturnedfurball]

TYSM