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007 C020200 HIGH YIELD BOND FUND
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007 C010500 5
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022 A000001 STATE STREET BANK AND TRUST COMPANY
022 B000001 04-1867445
022 C000001 853720
022 D000001 0
022 A000002 BEAR STEARNS & COMPANY, INC.
022 B000002 13-3299429
022 C000002 9406
022 D000002 5690
022 A000003 DEAN WITTER REYNOLDS
022 B000003 94-1671384
022 C000003 6073
022 D000003 8521
022 A000004 DONALDSON LUFKIN & JENRETTE
022 B000004 13-2741729
022 C000004 10703
<PAGE>
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022 C000005 2908
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022 A000006 SOCIETE GENERALE SECURITIES CORPORATION
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022 C000006 2010
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<PAGE>
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SIGNATURE STEPHEN G. HILL
TITLE PRESIDENT
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> INTERMEDIATE GOVERNMENT FUND CLASS A
<S> <C>
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<NAME> INTERMEDIATE GOVERNMENT FUND CLASS C
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<NET-CHANGE-IN-ASSETS> (3,246,006)
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<ACCUMULATED-GAINS-PRIOR> (7,246,344)
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<SERIES>
<NUMBER> 2
<NAME> HIGH YIELD BOND FUND CLASS A
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<PERIOD-TYPE> YEAR
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<PERIOD-START> SEP-30-1996
<PERIOD-END> SEP-30-1997
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<INVESTMENTS-AT-VALUE> 52,395,448
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<SENIOR-EQUITY> 0
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<SHARES-COMMON-PRIOR> 3,879,307
<ACCUMULATED-NII-CURRENT> 414,731
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (716,301)
<OVERDISTRIBUTION-GAINS> 0
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<SHARES-REINVESTED> 290,777
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</TABLE>
<TABLE> <S> <C>
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<SERIES>
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<NAME> HIGH YIELD BOND FUND CLASS C
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<PERIOD-START> SEP-30-1996
<PERIOD-END> SEP-30-1997
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<TOTAL-LIABILITIES> 1,524,688
<SENIOR-EQUITY> 0
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<SHARES-COMMON-PRIOR> 3,879,307
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<OVERDISTRIBUTION-NII> 0
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<OVERDISTRIBUTION-GAINS> 0
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<DIVIDEND-INCOME> 0
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<NUMBER-OF-SHARES-SOLD> 2,097,628
<NUMBER-OF-SHARES-REDEEMED> 1,154,673
<SHARES-REINVESTED> 290,777
<NET-CHANGE-IN-ASSETS> 15,010,903
<ACCUMULATED-NII-PRIOR> 245,567
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<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 189,084
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<PER-SHARE-NAV-BEGIN> 10.18
<PER-SHARE-NII> 0.85
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<EXPENSE-RATIO> 1.70
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</TABLE>
For period ended 09-30-97
File Number 811-5853
Sub-Item 77.B
Series 1 & 2
Suite 2800 Telephone (813)
223-7577
400 North Ashley Street
Tampa, FL 33601-2640
PRICE WATERHOUSE LLP
To the Shareholders and Board of Trustees of
Heritage Income Trust
In planning and performing our audit of the financial statements of the Heritage
Income Trust (the "Trust") for the year ended September 30, 1997, we considered
its internal control structure, including control activities for safeguarding
securities, in order to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to comply with the
requirements of Form N-SAR, not to provide assurance on internal control.
The management of the Trust is responsible for establishing and maintaining
internal control. In fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and related costs of
control activities. Generally, control activities that are relevant to an audit
pertain to the entity's objective of preparing financial statements for external
purposes that are fairly presented in conformity with generally accepted
accounting principles. Those control activities include the safeguarding of
assets against unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or irregularities
may occur and not be detected. Also, projection of any evaluation of internal
control to future periods is subject to the risk that it may become inadequate
because of changes in conditions or that the effectiveness of the design and
operation may deteriorate.
Our consideration of internal control would not necessarily disclose all matters
in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or operation of any
specific internal control components does not reduce to a relatively low level
the risk that errors or irregularities in amounts that would be material in
relation to the financial statements being audited may occur and not be detected
within a timely period by employees in the normal course of performing their
assigned functions. However, we noted no matters involving internal control,
including control activities for safeguarding securities, that we consider to be
material weaknesses as defined above as of September 30, 1997.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
/s/ Price Waterhouse LLP
- -------------------------------
Price Waterhouse LLP
Tampa, Florida
November 12, 1997
