Question

The City of Eastern Shores is trustee for a multi-government investment pool and has established an investment trust fund. Including in the investment trust fund, for management purposes, are investments in the amount of $13 million from the City's General Fund, $4 million from the City's private-purpose funds, and $58 million from other governments. Which of the following statements would be true?

a. The City would report all investments in the investment trust fund.
b. The City would report the $58 million in the investment trust fund, and $17 million in a permanent fund.
c. The City would report the $58 million in the investment trust fund, the $13 million in the General Fund, and the $4 million in private-purpose funds.
d. None of the above are true.

Answer 1

The City of Eastern Shores would report the investments in the investment trust fund, the General Fund, and the private-purpose funds separately.

Step-by-step explanation:

In this scenario, the City of Eastern Shores has established an investment trust fund as a trustee for a multi-government investment pool. The investment trust fund includes $13 million from the City's General Fund, $4 million from the City's private-purpose funds, and $58 million from other governments. Based on this information, the correct statement would be: c. The City would report the $58 million in the investment trust fund, the $13 million in the General Fund, and the $4 million in private-purpose funds. This is because the investments in the investment trust fund as well as the funds from the City's General Fund and private-purpose funds should be reported separately.