Define plan that provides annuity and disability benefits

Assignment Help Case Study
Reference no: EM13492609

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



 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


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, non-vested 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.


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

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

c.      Prepare a Statement of Net Assets for the Employees' Retirement Fund as of June 30, 2012.

d.      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?

Reference no: EM13492609

Write a summary of the case study

Please choose one of these ten business case studies: Write a summary of the case study that is about one page. Research and describe at least 3 technologies that could be use

Describe what might be required from a worker

How might Andrew be supported or assisted to access and use support services and associated resources and describe what might be required from a worker when supporting Andrew

Brief synopsis and overview of the presented case

Review the designated Harvard Business Review case study HOUSE, HEARTH, and HOME. In a five page paper submission: Provide a brief synopsis and overview of the presented case

What is the insurers liability for the loss

How would you present the choices and natures of such policies to the workers and the stakeholders are interested in purchasing their own life insurance policies using a capi

Under what condition might sketching and doodling contribute

Under what conditions might sketching and/or doodling contribute to effective communication in organizations? When may sketching and/or doodling detract from effective communi

Critically analyze the apple case

Critically analyze the Apple Case (reproduced below). In particular, update the research information by new research to include Apple's other product lines and decide the less

Why did not freds age discrimination case go anywhere

Why didn't Fred's age discrimination case go anywhere? Is TEAM FUN! open to discrimination charges in other areas? What should be done to protect TEAM FUN! from discrimination

Has weyland engaged in unfair labor practices

Does the female crane operator have a valid sex discrimination claim under disparate impact? What about disparate treatment - Has Weyland engaged in unfair labor practices in


Write a Review

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd