7:01 5-6. A citizen group raised funds to establish an endowment for the Eastvil

Question

7:01 5-6. 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: .11? Trial Balance-December 31, 2017 Cash Investments Additions to permanent endowments Investment income Expenditures-subscriptions Net increase in fair value of investments Accrued interest receivable Accounts payable a. Prepare any closing entries necessary at year-end. b. Prepare a Statement of Revenues Expenditures, and Changes in Fund Balance for the library permanent

Explanation / Answer

1) Journal Entry ;-

2) Statments of Revenues, Expenditures and Changes in Fund Balance :-

3) Balance sheet :-

Particulars Debit($) Credit($) Revenues-Additions to permanent endowments A/c Dr. 510000 Revenues-Investment Income A/c Dr. 48000 Revenues-Increase in fair value of investments A/c Dr. 8000 To Expenditures-Subscriptons 39500 To Fund Balance 526500

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