In December 2019, the HAmilton County Board of Commissioners establised the Hamilton County OPEB Trust Fynd. Retired employees of Hamilton County can Oarticipate in postemployment beneifits through the Trust. The Trust is a single - empoyer derfined beneifit plan. The benefits provided are health insurance and life insurance. In December 2019, the County made a one-time contribution to the fund of $15,000,000. No other events took place in 2019. Fiscal year Transcactions where as followed: 1.The County paid its actuarially determined annual contribution of $8,750,000. 2. Member (employee) contributions totalled $4,500,000. Of this $4,350,000 was collected by December 31 and the remainder will be collected in January 2021. 3. Cash Totaling $20,000,000 was invested in U.S. Government securities. 4. Interest totaling $1,407,000 was earned on these securities. Of this amount $1,346,000 was collected during the year. 5. Because the County offers a drug plan to retired employees, the federal government Medicare program provides a subsidyto the County. The County received $712,000 from this subsidy. 6. Benifit claims from employees totaled $11,722,000 for the year.By the end, $9,460,000 had been paid to employees. 7. Administrative expenses totaled $147,000 (all paid in the current year.) : Journal Entries: Particulars Debit Credit 1 Cash A/C Dr 87,50,000 To Additions-Employer Contributions A/C 87,50,000 2 Cash A/C Dr 43,50,000 Contributions Receivalbe A/C Dr 1,50,000 To Additions-Member Contributions 45,00,000 3 Investment in US Government Securities A/C Dr 2,00,00,000 To Cash A/C 2,00,00,000 4 Interest Receivable A/C Dr 61,000 Cash A/C Dr 13,46,000 To Additions-Interest Income A/C 14,07,000 5 Cash A/C Dr 7,12,000 To Additions- Medicare Program Subsidy 7,12,000 6 Deductions-Employees Benefits 1,17,22,000 To Cash A/C 94,60,000 To Accounts Payable 22,62,000 7 Deductions-Admin Expense A/C Dr 1,47,000 To Cash A/C 1,47,000 Required: A. Prepare a Statement of Fiduciary Net Position as of December 31, 2020
In December 2019, the HAmilton County Board of Commissioners establised the Hamilton County OPEB Trust Fynd. Retired employees of Hamilton County can Oarticipate in postemployment beneifits through the Trust. The Trust is a single - empoyer derfined beneifit plan. The benefits provided are health insurance and life insurance.
In December 2019, the County made a one-time contribution to the fund of $15,000,000. No other events took place in 2019.
Fiscal year Transcactions where as followed:
1.The County paid its actuarially determined annual contribution of $8,750,000.
2. Member (employee) contributions totalled $4,500,000. Of this $4,350,000 was collected by December 31 and the remainder will be collected in January 2021.
3. Cash Totaling $20,000,000 was invested in U.S. Government securities.
4. Interest totaling $1,407,000 was earned on these securities. Of this amount $1,346,000 was collected during the year.
5. Because the County offers a drug plan to retired employees, the federal government Medicare program provides a subsidyto the County. The County received $712,000 from this subsidy.
6. Benifit claims from employees totaled $11,722,000 for the year.By the end, $9,460,000 had been paid to employees.
7. Administrative expenses totaled $147,000 (all paid in the current year.)
| Particulars | Debit | Credit | |
| 1 | Cash A/C Dr | 87,50,000 | |
| To Additions-Employer Contributions A/C | 87,50,000 | ||
| 2 | Cash A/C Dr | 43,50,000 | |
| Contributions Receivalbe A/C Dr | 1,50,000 | ||
| To Additions-Member Contributions | 45,00,000 | ||
| 3 | Investment in US Government Securities A/C Dr | 2,00,00,000 | |
| To Cash A/C | 2,00,00,000 | ||
| 4 | Interest Receivable A/C Dr | 61,000 | |
| Cash A/C Dr | 13,46,000 | ||
| To Additions-Interest Income A/C | 14,07,000 | ||
| 5 | Cash A/C Dr | 7,12,000 | |
| To Additions- Medicare Program Subsidy | 7,12,000 | ||
| 6 | Deductions-Employees Benefits | 1,17,22,000 | |
| To Cash A/C | 94,60,000 | ||
| To Accounts Payable | 22,62,000 | ||
| 7 | Deductions-Admin Expense A/C Dr | 1,47,000 | |
| To Cash A/C | 1,47,000 |
Required:
A. Prepare a Statement of Fiduciary Net Position as of December 31, 2020
It is given that, In December 2019, the County made a one-time contribution to the fund of $15,000,000. So the net asset at the beginning of the year would be $15,000,000.
From the above transactions, we will consider Employer Contribution, Member contribution, Medicare subsidy, and Interest income as additions to the net assets and on the other hand, employees' benefit, administrative expenses will be considered as deductions to the net asset.
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