Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / ACCT567 Week 5 Case Study The City of Shipley maintains an Employee Retirement Fund—a single-employer, defined benefit plan that provides annuity and disability benefits

ACCT567 Week 5 Case Study The City of Shipley maintains an Employee Retirement Fund—a single-employer, defined benefit plan that provides annuity and disability benefits

Accounting

ACCT567 Week 5 Case Study

The City of Shipley maintains an Employee Retirement Fund—a single-employer, defined benefit plan that provides annuity and disability benefits. The fund is financed by a process that makes actuarially determined contributions from the city’s general fund and by contributions that are made by the employees. The general fund is handling the administration of the retirement fund and it does not have any administrative expenses. The Statement of Net Assets for the Employees’ Retirement Fund as of July 1, 2011 is shown below.

                                                                  City of Shipley

                                                      Employees Retirement Fund

                                                          Statement of Net Assets

                                                               As of July 1, 2011

 

Assets

 Cash                                                                                        $    60,000

 Accrued Interest Receivable                                                   160,000

 Investments, at fair value

    Bonds                                                                                     5,500,000

    Common Stock                                                                     1,600,000

      Total Assets                                                                     $  7,320,000

Liabilities

 Accounts Payable and Accrued Expenses                              430,000

Net Assets Held in Trust for Pension Benefits                 $  6,890,000

 

The following transactions took place during the fiscal year 2012.

 

  1. The interest receivable on investments was collected in cash.
  2. Member contributions in the amount of $460,000 were received in cash; the city’s general fund also contributed $700,000 in cash.
  3. Annuity benefits of $780,000 and disability benefits of $200,000 were recorded as liabilities.
  4. Accounts payable and accrued expenses in the amount of $820,000 were paid in cash.
  5. Interest income of $320,000 and dividends in the amount of $60,000 were received in cash.
  6. Bond interest income of $160,000 was accrued at the end of year.
  7. Refunds of $150,000 were made in cash to terminated, nonvested participating employees.
  8. Common stocks, which are carried at a fair value of $500,000, were sold for $472,000. The amount of the sales price of the stock plus an additional $360,000 was invested in stocks.
  9. As of the end of the fiscal year, June 30, 2012, a determination has been made that the fair value of the stocks held by the pension plan had decreased by $60,000; the fair value of bonds had increased by $35,000.
  10. Temporary accounts for the year were closed.

 

Instructions:

 

  1. Record the transactions on the books of the Employees Retirement Fund.
  2. Prepare a Statement of Changes in Net Assets for the Employees Retirement Fund for the Year Ended June 30, 2012.
  3. Prepare a Statement of Net Assets for the Employees’ Retirement Fund as of June 30, 2012.
  4. A city council member asked you the following question: “What are some of the differences between a defined benefit plan and a defined contribution plan? What are some of the accounting issues that the city faces when accounting for defined benefit plans as compared to a defined contribution plan?

 

 

Grading Rubric for Case Study II

 

 

Category

Points

%

Description

Documentation and Formatting

10

                  20%

Worksheet will be done in Excel and will contain formulas to receive maximum credit.

Organization and Cohesiveness

15

30%

Calculations for all parts should be organized and correctly labeled.

Content

25

50%

A quality case study will have all required work completed and will be correct.

Total

50

100%

A quality project will meet or exceed all of the above requirements.

 

Option 1

Low Cost Option
Download this past answer in few clicks

11.99 USD

PURCHASE SOLUTION

Already member?


Option 2

Custom new solution created by our subject matter experts

GET A QUOTE