Net Assets and Employee’s Retirement Fund

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, 2014, is shown here:


Employees’ Retirement Fund

Statement of Fiduciary Net Position

As of July 1, 2014



Accrued Interest

Investments, at Fair Value:

Bonds 4,500,000

Common Stocks 1,300,000

Assets 5,985,000


Accounts Payable and Accrued
Expenses 350,000

Fiduciary Net Position Restricted for
Pensions $5,635,000

“During the year ended June 30,
2015, the following transactions occurred:

1. The interest receivable on investments
was collected in cash.

2. Member contributions in the amount of
$250,000 were received in cash. The city’s General Fund also contributed
$750,000 in cash.

3. Annuity benefits of $700,000 and
disability benefits of $150,000 were recorded as liabilities.

4. Accounts payable and accrued expenses
in the amount of $900,000 were paid in cash.

5. Interest income of $240,000 and
dividends in the amount of $40,000 were received in cash. In addition, bond
interest income of $60,000 was ac- crued at year-end.

6. Refunds of $133,000 were made in cash
to terminated, nonvested participants.

7. Common stocks, carried at a fair value
of $500,000, were sold for $480,000. That $480,000, plus an additional
$300,000, was invested in stocks.

8. At year-end, it was determined that
the fair value of stocks held by the pension plan had decreased by $40,000; the
fair value of bonds had in- creased by $35,000.

9. Nominal accounts for the year were


a. Record the transactions on the books
of the Employees’ Retirement Fund.

b. Prepare a Statement of Changes in
Fiduciary Net Position for the Employees’ Retirement Fund for the Year Ended
June 30, 2015

c. Prepare a Statement of Fiduciary Net Position for the
Employees’ Retirement Fund as of June 30,2015

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