7. In accordance with the terms of the Art League endowment, income earned by the endowment was used to provide free art instruction for children with disabilities at a cost of $1,005. This amount was allocated to community art education. 8. Depreciation on equipment in the amount of $1,822 was recorded. 9. Expenses for the year were allocated 30 percent to Exhibition Program, 30 percent to Community Art Education, 25 percent to Management and General Expenses, and 15 percent to Fund-Raising. 10. Proceeds of art sales, net of commissions charged by the Art League, totaled $9,752. This amount was paid to member artists during the year. 11. All nominal accounts were closed at year-end. Required b. Prepare journal entries to record these transactions. Expense transactions should be initially recorded by object classification unless otherwise instructed; in entry 9, expenses will be allocated to functions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) Cash Short-term Investments Grants Receivable Prepaid Expense Equipment ART LEAGUE Post-closing Trial Balance June 30, 2022 Allowance for Depreciation-Equipment Long-Term Investments-With Donor Restrictions Accounts Payable and Accrued Expenses Net Assets Without Donor Restrictions Net Assets With Donor Restrictions-Programs Net Assets With Donor Restrictions-Permanent Endowment Totals Debits $ 2,385 Credits 13,911 6,400 1,330 10,245 $ 2,606 5,947 2,829 9,191 19,645 5,947 $40,218 $40,218 Following is information summarizing the transactions of the Art League for the year ended June 30, 2023. 1. During the year, cash was received from the following sources: grants that had been reported as a receivable on June 30, 2022, $6,400; annual contributions without donor restrictions from fund drives and other unrestricted gifts, $21,581; membership dues, $17,185; tuition and fees for educational workshops, $7,154; and sales of members' art, $12,190, of which 20 percent represents commissions earned by the Art League. 2. Interest earnings were as follows: interest on investments without donor restrictions totaled $704; interest on investments restricted for programs totaled $943; interest on investments in the permanent endowment totaled $362 (these investment earnings are restricted for program use). 3. A grant receivable of $5,380 was recorded at year-end on a grant to complete and deliver a survey of art programs conducted in the county (the grant was determined to be an exchange transaction). The $5,380 the Art League invoiced related to work done this year. 4. The Art League receives free rent from the city at an estimated value of $19,800 a year. 5. Expenses incurred during the year were as follows: salaries and fringe benefits, $48,700; utilities, $3,260; printing and postage, $1,490; and miscellaneous, $820. As of year-end, the balances of the following accounts were Prepaid Expenses, $1,020, and Accounts Payable and Accrued Expenses, $3,016. 6. During the year, $3,800 of short-term investments were sold, with the proceeds used to purchase two computers and a printer at a cost of $3,015. The resources used were restricted for the purchase of equipment.

7. In accordance with the terms of the Art League endowment, income earned by the endowment was used to provide free art instruction for children with disabilities at a cost of $1,005. This amount was allocated to community art education. 8. Depreciation on equipment in the amount of $1,822 was recorded. 9. Expenses for the year were allocated 30 percent to Exhibition Program, 30 percent to Community Art Education, 25 percent to Management and General Expenses, and 15 percent to Fund-Raising. 10. Proceeds of art sales, net of commissions charged by the Art League, totaled $9,752. This amount was paid to member artists during the year. 11. All nominal accounts were closed at year-end. Required b. Prepare journal entries to record these transactions. Expense transactions should be initially recorded by object classification unless otherwise instructed; in entry 9, expenses will be allocated to functions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) Cash Short-term Investments Grants Receivable Prepaid Expense Equipment ART LEAGUE Post-closing Trial Balance June 30, 2022 Allowance for Depreciation-Equipment Long-Term Investments-With Donor Restrictions Accounts Payable and Accrued Expenses Net Assets Without Donor Restrictions Net Assets With Donor Restrictions-Programs Net Assets With Donor Restrictions-Permanent Endowment Totals Debits $ 2,385 Credits 13,911 6,400 1,330 10,245 $ 2,606 5,947 2,829 9,191 19,645 5,947 $40,218 $40,218 Following is information summarizing the transactions of the Art League for the year ended June 30, 2023. 1. During the year, cash was received from the following sources: grants that had been reported as a receivable on June 30, 2022, $6,400; annual contributions without donor restrictions from fund drives and other unrestricted gifts, $21,581; membership dues, $17,185; tuition and fees for educational workshops, $7,154; and sales of members' art, $12,190, of which 20 percent represents commissions earned by the Art League. 2. Interest earnings were as follows: interest on investments without donor restrictions totaled $704; interest on investments restricted for programs totaled $943; interest on investments in the permanent endowment totaled $362 (these investment earnings are restricted for program use). 3. A grant receivable of $5,380 was recorded at year-end on a grant to complete and deliver a survey of art programs conducted in the county (the grant was determined to be an exchange transaction). The $5,380 the Art League invoiced related to work done this year. 4. The Art League receives free rent from the city at an estimated value of $19,800 a year. 5. Expenses incurred during the year were as follows: salaries and fringe benefits, $48,700; utilities, $3,260; printing and postage, $1,490; and miscellaneous, $820. As of year-end, the balances of the following accounts were Prepaid Expenses, $1,020, and Accounts Payable and Accrued Expenses, $3,016. 6. During the year, $3,800 of short-term investments were sold, with the proceeds used to purchase two computers and a printer at a cost of $3,015. The resources used were restricted for the purchase of equipment.

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter13: Tax Credits And Payment Procedures

Section: Chapter Questions

Problem 14CE

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