FUNDAMENTALS OF ADVANCED ACCOUNTING >I
6th Edition
ISBN: 9781307007350
Author: Hoyle
Publisher: MCG/CREATE
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Chapter 12, Problem 7Q
To determine
Explain the manner in which the amount of net pension liability to be reported in the government-wide financial statements determined.
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The City of Sweetwater maintains an Employees’ Retirement Fund, a single-employer defined benefit plan that provides annuity and disability benefits. The fund is financed by actuarially determined contributions from the city’s General Fund and by contributions from employees. Administration of the retirement fund is handled by General Fund employees, and the retirement fund does not bear any administrative expenses. The Statement of Fiduciary Net Position for the Employees’ Retirement Fund as of July 1, 2019, is shown here:
CITY OF SWEETWATER
Employees’ Retirement Fund
Statement of Fiduciary Net Position
As of July 1, 2019
Assets
Cash
$
137,000
Accrued Interest Receivable
57,800
Investments, at Fair Value:
Bonds
4,506,000
Common Stocks
1,307,000
Total Assets
6,007,800
Liabilities
Accounts Payable and Accrued Expenses
351,300
Fiduciary Net Position Restricted for Pensions
$
5,656,500
During the year ended…
The City of Huble has a defined benefit pension plan for a number of its employees. Which of the following is not included immediately in the determination of pension expense that this government should recognize in its government-wide financial statements?
Service cost.
Interest on total pension liability.
Changes in pension liability as a result of a change in benefit terms.
Changes in pension liability as a result of a change in economic or demographic assumptions.
The City of Columbus has approximately 2,000 employees. For the past three decades, the city has provided its employees with a defined benefit pension plan. The plan contract calls for specific payment amounts to be made to each retiree based on a set formula. Money is transferred periodi-cally to a pension trust fund where it is accumulated and invested so that eventual payments can be made.a. Describe how the city determines the amount (if any) of a net pension liability that should be reported within its government-wide financial statements.b. Describe how the city determines the amount (if any) of pension expense that should be reported within its government-wide financial statements.c. How is the pension reported in the fund financial statements for the governmental funds?
Chapter 12 Solutions
FUNDAMENTALS OF ADVANCED ACCOUNTING >I
Ch. 12 - Prob. 1QCh. 12 - Prob. 2QCh. 12 - Prob. 3QCh. 12 - Prob. 4QCh. 12 - A landfill is scheduled to be filled to capacity...Ch. 12 - Prob. 6QCh. 12 - Prob. 7QCh. 12 - Prob. 8QCh. 12 - Prob. 9QCh. 12 - Prob. 10Q
Ch. 12 - Prob. 11QCh. 12 - Prob. 12QCh. 12 - Prob. 13QCh. 12 - What does a comprehensive annual financial report...Ch. 12 - Prob. 15QCh. 12 - Prob. 16QCh. 12 - What is the difference between a blended component...Ch. 12 - Prob. 18QCh. 12 - Prob. 19QCh. 12 - Prob. 20QCh. 12 - Prob. 21QCh. 12 - How are internal service funds reported on...Ch. 12 - Prob. 23QCh. 12 - A general purpose government takes over a special...Ch. 12 - Prob. 25QCh. 12 - Prob. 26QCh. 12 - Prob. 1PCh. 12 - Prob. 2PCh. 12 - Prob. 3PCh. 12 - Prob. 4PCh. 12 - Prob. 5PCh. 12 - A city creates a solid waste landfill. It assesses...Ch. 12 - Prob. 7PCh. 12 - If this landfill is judged to be a proprietary...Ch. 12 - If this landfill is judged to be a governmental...Ch. 12 - The City of Nomanchester has a defined benefit...Ch. 12 - Prob. 11PCh. 12 - Prob. 12PCh. 12 - Prob. 13PCh. 12 - Prob. 14PCh. 12 - A city builds sidewalks throughout its various...Ch. 12 - Prob. 16PCh. 12 - Prob. 17PCh. 12 - Prob. 18PCh. 12 - Prob. 19PCh. 12 - Prob. 20PCh. 12 - Prob. 21PCh. 12 - Prob. 22PCh. 12 - Prob. 23PCh. 12 - Prob. 24PCh. 12 - Prob. 25PCh. 12 - Prob. 26PCh. 12 - Prob. 27PCh. 12 - Prob. 28PCh. 12 - Prob. 29PCh. 12 - Prob. 30PCh. 12 - Prob. 31PCh. 12 - Prob. 32PCh. 12 - Prob. 33PCh. 12 - Prob. 34PCh. 12 - Prob. 35PCh. 12 - The City of Francois, Texas, has begun the process...Ch. 12 - Prob. 37PCh. 12 - Prob. 38PCh. 12 - Prob. 39PCh. 12 - Prob. 40PCh. 12 - Prob. 41PCh. 12 - 42. For each of the following, indicate whether...Ch. 12 - For problems 40 through 43, use the following...Ch. 12 - Prob. 44PCh. 12 - Prob. 45PCh. 12 - Prob. 46PCh. 12 - On the first day of the year, the City of Wolfe...Ch. 12 - Prob. 48PCh. 12 - A city has a solid waste landfill that was filled...Ch. 12 - Use the same information as in problem 44 except...Ch. 12 - Prob. 51PCh. 12 - Prob. 52PCh. 12 - Prob. 53PCh. 12 - Prob. 2DYSCh. 12 - Read the following journal article: 25 Years of...Ch. 12 - Prob. 4DYSCh. 12 - Prob. 5DYSCh. 12 - The City of Larissa recently opened a solid waste...
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- The City of Huble has a defined benefit pension plan for a number of its employees. Which of thefollowing is not included immediately in the determination of pension expense that this government should recognize in its government-wide financial statements?a. Service cost.b. Interest on total pension liability.c. Changes in pension liability as a result of a change in benefit terms.d. Changes in pension liability as a result of a change in economic or demographic assumptions.arrow_forwardThe City of Columbus has approximately 2,000 employees. For the past three decades, the city has provided its employees with a defined benefit pension plan. The plan contract calls for specific payment amounts to be made to each retiree based on a set formula. Money is transferred periodically to a pension trust fund where it is accumulated and invested so that eventual payments can be made. Describe how the city determines the amount (if any) of a net pension liability that should be reported within its government-wide financial statements. Describe how the city determines the amount (if any) of pension expense that should be reported within its government-wide financial statements. How is the pension reported in the fund financial statements for the governmental funds?arrow_forwardThe City of Ronchester has a defined benefit pension plan for its firefighters. How is the amount of pension expense determined that the city should recognize the current year?arrow_forward
- The City of Sweetwater maintains in trust the Employees’ Retirement Fund, a single-employer defined benefit plan that provides annuity and disability benefits. The fund is financed by actuarially determined contributions from the city’s General Fund and by contributions from employees. Administration of the retirement fund is handled by General Fund employees, and the retirement fund does not bear any administrative expenses. The Statement of Fiduciary Net Position for the Employees’ Retirement Fund as of July 1, 2023, is shown here: CITY OF SWEETWATER Employees’ Retirement Fund Statement of Fiduciary Net Position As of July 1, 2023 Assets Cash $145,000 Accrued Interest Receivable 59,200 Investments, at Fair Value: Bonds 4,507,000 Common Stocks 1,313,000 Total Assets 6,024,200 Liabilities Accounts Payable and Accrued Expenses 384,000 Fiduciary Net Position Restricted for Pensions $5,640,200 During the year ended June 30, 2024, the following…arrow_forwardThe City of Ronchester has a defined benefit pension plan for its firefighters. How is the amount of pension expense determined that should be recognized in the current year?arrow_forwardWilmer County provides a defined benefit pension plan for its employees. The county accounts for the pension plan in a pension trust fund, which is included in the county's basic financial statements. In the years indicated, the county engaged in the following transactions related to the pension trust fund. Prepare all necessary journal entries. Clearly indicate the fund in which the entry is being made. If no entry is needed, please write "No entry required." a) In Year 1, the pension trust fund sent billings to the general fund and the City Utility (enterprise) Fund for the actuarially determined amount of required contributions. The general fund was billed $300,000 but paid only $220,000 during the year. The enterprise fund was billed $450,000 and paid $530,000. b) In Year 2, the pension trust fund sent billings to the general fund and the City Utility Fund for the actuarially determined amount of required contributions. The general fund was billed $320,000 and paid the entire…arrow_forward
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