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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
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Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Minicipal Pension Plan financial reporting question - We audit

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Minicipal Pension Plan financial reporting question - We audit and prepare financial statements for a Municipal Pension Plan. As of year end, there were unsettled purchases of investments of $2,195,558, which were exeucted but not settled until after year end. Additionally, there were unsettled sales of investments of $2,185,863. Is this presented on the financial statements at the gross amounts? Also, how is the difference, a credit balance of $9,695 reported on the balance sheet? Please advise these two items
Submitted: 1 year ago.
Category: Finance
Expert:  Megan C replied 1 year ago.
Thank you for your question, and thanks for using JustAnswer.com.

On your financial statement, for the unsettled purchases you will have a receivable called Due from Broker for Unsettled Investment sales for the entire amount. (2,185,863)

You will also have a liability called Due To Broker for Unsettled Investment Purchases. The entire amount will be noted here. (2,195,558)

You don't net the two together -you report each separately.

You can CLICK HERE and look at this financial statement to see what we are talking about. Please let me know if you need additional assistance. Thanks again for using JustAnswer.com and have a happy, and safe, 2013.

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Customer: replied 1 year ago.


Did you receive my question? Where is the $9,695 credit difference reported on the balance sheet? Are the financials you sent in accordance with GASB? Thanks

Expert:  Megan C replied 1 year ago.
Thank you for your follow up. As the gross amounts are reported as an asset for the unsettled sales and a liability for the unsettled purchases, you don't do anything with the $9,695 credit difference. Your asset will be $9,695 less than your liability so the difference is already accounted for by using the gross amounts.

Yes, these are the proper financial statements.

Please let me know if you need anything additional. Thanks for using JustAnswer.com and have a happy, and safe, 2013.

** Please take a moment to rate my response as "Excellent" so that I may be compensated for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site*
Customer: replied 1 year ago.

We have to have a balanced entry where the debits equal the credits. Where was this reported on the balance sheet? We are out of balance by the $9,695 Thanks

Expert:  Megan C replied 1 year ago.
You will make two separate entries - one for the receivable and one for the liability.

You will debit the receivable and credit your investment income account - just like any other sale of investment.

You will credit the payable account and debit the same account that you debit when you make entries that have already settled.

I hope this makes sense. Please let me know if you need further information.

** Please take a moment to rate my response as "Excellent" so that I may be compensated for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site*
Customer: replied 1 year ago.

I have no problem with the recording when the purchases and sales are recorder; however, the credit of $9.695 credit difference concerns me. Please advise

Expert:  Megan C replied 1 year ago.
Thank you for your question, and thanks again for your clarification.

You are going to make two separate entries, each one of them will balance.

The first is to Debit the receivable account for $2,185,863 and credit the income account for the same amount. This entry balances.

The second is to credit the payable account for $2,195,558 and debit the investment account just like any other investment purchase you make. This entry balances.

The difference of 9,695 does not matter. You do not do anything separately to account for the difference between the payable and the receivable.

I hope this makes more sense. Please let me know if you need further assistance.

** Please take a moment to rate my response as "Excellent" so that I may be compensated for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site*
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 15588
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and other Finance Specialists are ready to help you
Customer: replied 1 year ago.

Thanks this is what I did but since thins is going to be subject to Peer
Review, I wanted to confirm

Expert:  Megan C replied 1 year ago.
Thank you for the positive rating. Please remember me the next time you have a question. Simply enter "MyVirtualCPA" in the subject of your question, and it will be routed directly to me. Thank you again for using JustAnswer

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