Reference no: EM131703488

Question: (Journal entries and financial statements for a Private Purpose Trust Fund) Seaview Township received a $1,000,000 gift from J. R. Chancellor to sponsor an annual community picnic. All reasonable costs associated with sponsoring the picnic are to be paid from the gift. To guarantee proper use of the money, Chancellor made the donation in the form of a trust, which is accounted for as a Private Purpose Trust. The following events and transactions took place during 2012. Record these entries in the Chancellor Community Picnic Fund. Then prepare a statement of changes in fiduciary net position for 2012 and a statement of fiduciary net position as of December 31, 2012, for the fund.

1. The township received the gift.

2. The city paid $10,000 to an advertising agency to publicize the picnic.

3. The cost of permits for the picnic totaled $500.

4. The Seaview Cafe agreed to cater the entire picnic for $75,000, payable in advance.

5. Various performers were engaged to provide entertainment during the picnic at a total cost of $12,500. Cash was paid in advance.

6. The picnic was held and was a great success. The weather cooperated, and picnic attendance met all expectations.

7. The Police Department spent $15,000 for extra police to control the traffic and crowds at the picnic. The trust reimbursed the department in cash for these costs.

8. The Sanitation Department incurred $35,000 of costs in cleaning up after the picnic. The trust agreed to reimburse the department (in the General Fund) for these costs. No cash has yet been paid.

9. The remaining cash, except for $10,000, was invested in CDs. According to the trust agreement, this money could be invested and used to provide for the 2013 picnic.