The mccracken county humane society mchs which is part of a

Assignment Help Financial Accounting

Reference no: EM13351767

The McCracken County Humane Society (MCHS), which is part of a county's reporting entity, established a permanent fund to give support for its pet neutering program. As of the starting of the year, the fund had a balance of $600.000, composed of both marketable securities and cash.

The program itself, which is accounted for in a special revenue fund, is funded by both the income and direct contributions from the permanent fund. At the start of the year, the special revenue fund had assets (all invested) of $26,000.

The subsequent transactions and events happened in a recent year:

1. The MCHS conducted a Walk Your Pet Day fundraising drive. The event raised $120,000 of which $20,000 was in pledges expected to be collected shortly after year-end.

2. The society acquired medicine and food at a cost of $60,000 (cash). Through the year it used $30,000 of these supplies. The society accounts for supplies on a consumption basis. It incurred other operating costs all paid in cash of $85,000.

3. The society earned interest of $45,000 on investments accounted for in the permanent fund.

4. In the current year, the market value of the investments held by the permanent fund increased by $30,000. Per the terms of the agreement establishing the endowment, all capital gains, both realized and unrealized, must be included to principal.

5. In the year the value of investments held by the special revenue fund increased by $3,000.

6. The society transferred cash to the special revenue fund in the amount of the earnings of the particular revenue fund.

a. Arrange journal entries to record the transactions and events. Be sure you shown the fund in which they would be recorded.

b. In your opinion, could the unrealized gains on the investment held in the special revenue fund be nonexpendable or expendable? Describe.

c. How is the transfer from the permanent fund to the particular revenue fund reported in the government-wide statements?

Reference no: EM13351767

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