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4 April, 20:48

A citizen group raised funds to establish an endowment for the Eastville City Library. Under the terms of the trust agreement, the principal must be maintained, but the earnings of the fund are to be used to purchase database and periodical subscriptions for the library. A preclosing trial balance of the library permanent fund follows:

Trial Balance-December 31, 2017 Debits Credits

Cash $ 8,500

Investments 518,000

Additions to permanent endowments $ 510,000

Investment income 48,000

Expenditures-subscriptions 39,500

Intergovernmental grant 8,000

Net increase in fair value of investments 2,000

Accrued interest receivable 2,000

Accounts payable $ 568,000 $ 568,000

Prepare any closing entries necessary at year-end

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  1. 4 April, 21:04
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    income statement for the year ended

    investment income $48,000

    Intergoverment grant 8,000

    Net increase in fair value of investemnt 2,000

    Total Income 58,000

    Expenditure - Subscription (39,500)

    Net income 18,500

    Balance sheet as at the year end

    Asset

    cash $8,500

    Investment 518,000

    Accrued interest receivable 2,000

    528,500

    Additional to permanent endowments 510,000

    Net Income 18,500

    528,500
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