(solution) ACCT567 Case study 2, week 5

(solution) ACCT567 Case study 2, week 5

please see attachment Document Preview: ACCT567 Case Study II (Week 5)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, 2011Assets Cash $ 60,000 Accrued Interest Receivable 160,000 Investments, at fair value Bonds 5,500,000 Common Stock1,600,000 Total Assets $ 7,320,000Liabilities Accounts Payable and Accrued Expenses 430,000Net Assets Held in Trust for Pension Benefits $ 6,890,000The following transactions took place during the fiscal year 2012:The interest receivable on investments was collected in cash.Member contributions in the amount of $ 460,000 were received in cash, the city’s General Fund also contributed $ 700,000 in cash.Annuity benefits of $ 780,000 and disability benefits of $ 200,000 were recorded as liabilities.Accounts payable and accrued expenses in the amount of $ 820,000 were paid in cash. Interest income of $ 320,000 and dividends in the amount of $60,000 were received in cash. Bond Interest Income of $ 160,000 was accrued at the end of year.Refunds of $ 150,000 were made in cash to terminated, non-vested participating employees.Common stocks, which are carried at a fair value of $ 500,000, were sold for $472,000. The amount of the…