Exercise 3 Food for the Golden Years is a private, not-for-profit organization that provides free meals for the post-65 age group in the suburbs of a large city. Record the following transactions in the accounts of Food for the Golden Years. The following transactions affected the accounts of Food for the Golden Years. 1. Unrestricted cash gifts that were received last year, but designated for use in the current year, totaled $20,000. 2. Unrestricted pledges of $40,000 were received. Five percent of the pledges typically prove uncollectible. Additional cash contributions during the year totaled $25,000. 3. Donations of food totaled $100,000. The inventory of food on hand decreased by $1,500 during the year. 4. The following expenses were incurred: Salary of director, $15,000; facility rental for the meals program, $2,500; and purchases of food, $45,000. 5. Pledges of $250,000 were received during the year. The pledges were restricted for use in purchasing new delivery vans. All of these pledges are expected to be collected in the next fiscal year. Required: Make journal entries for the aforementioned transactions.
Exercise 3 Food for the Golden Years is a private, not-for-profit organization that provides free meals for the post-65 age group in the suburbs of a large city. Record the following transactions in the accounts of Food for the Golden Years. The following transactions affected the accounts of Food for the Golden Years. 1. Unrestricted cash gifts that were received last year, but designated for use in the current year, totaled $20,000. 2. Unrestricted pledges of $40,000 were received. Five percent of the pledges typically prove uncollectible. Additional cash contributions during the year totaled $25,000. 3. Donations of food totaled $100,000. The inventory of food on hand decreased by $1,500 during the year. 4. The following expenses were incurred: Salary of director, $15,000; facility rental for the meals program, $2,500; and purchases of food, $45,000. 5. Pledges of $250,000 were received during the year. The pledges were restricted for use in purchasing new delivery vans. All of these pledges are expected to be collected in the next fiscal year. Required: Make journal entries for the aforementioned transactions.
Chapter23: Exempt Entities
Section: Chapter Questions
Problem 27P
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Transcribed Image Text:Exercise 3
Food for the Golden Years is a private, not-for-profit organization that provides free meals for the post-65 age group in the suburbs
of a large city. Record the following transactions in the accounts of Food for the Golden Years. The following transactions affected
the accounts of Food for the Golden Years.
1.
Unrestricted cash gifts that were received last year, but designated for use in the current year, totaled $20,000.
2. Unrestricted pledges of $40,000 were received. Five percent of the pledges typically prove uncollectible. Additional cash
contributions during the year totaled $25,000.
3.
4.
Donations of food totaled $100,000. The inventory of food on hand decreased by $1,500 during the year.
The following expenses were incurred: Salary of director, $15,000; facility rental for the meals program, $2,500; and purchases
of food, $45,000.
5. Pledges of $250,000 were received during the year. The pledges were restricted for use in purchasing new delivery vans. All of
these pledges are expected to be collected in the next fiscal year.
Required:
Make journal entries for the aforementioned transactions.
Exercise 4
The Rehabilitation Clinic is a private, not-for-profit organization that provides free rehabilitation health services for the uninsured.
The following transactions occurred for the Rehabilitation Clinic.
1.
2.
3.
Unrestricted cash gifts that were received last year, but designated for use in the current year, totaled $40,000.
Unrestricted pledges of $400,000 were received. Two percent of the pledges typically prove uncollectible. Additional cash
contributions during the year totaled $200,000.
Gifts in kind were received that were sold at a silent auction for $32,000. The fair value of the donated gifts in kind could not be
reasonably determined.
4. Expenses were incurred as follows: Salary of doctor, $110,000; facility rental for the clinic program, $60,000; purchases of
supplies, $10,000; and utility costs, $12,000.
5. Marketable securities with a fair value of $520,000 were received.
with a stipulation that the clinic use the funds to purchase a suitable property for the clinic.
Required:
Make journal entries for the aforementioned transactions.
Exercise 5
Little Town Hospital is a private, non-profit hospital. The following information is available about the operations.
Gross patient services charges totaled Php4,000,000.
Included in the above revenues are: charity services, Php125,000; contractual adjustments, Php350,000; courtesy allowances,
Php10,000; and estimated uncollectible amounts, Php150,000.
1.
2.
3.
Premium fees receipts were Php125,000.
4.
Purchased Php40,000 of hospital supplies on account, with payments on that account, Php36,000.
5.
6.
Received cash donations for a new hospital wing of Php1,100,000.
Paid contractor Php275,000 for billed costs toward the new hospital wing.
Required:
Make journal entries for the aforementioned transactions.
Exercise 6
Remote Reconstructive is a private, non-profit hospital. The following information is available about the operations.
Gross patient services charges totaled Php4,500,000.
1.
2.
3.
4.
Included in the above revenues are: charity services, Php165,000; contractual adjustments, Php400,000; and courtesy
allowances, Php14,000.
Received marketable securities valued at Php115,000 for the purchase of new diagnostic equipment.
The marketable securities were sold for Php124,000 and diagnostic equipment was purchased at a cost of Php138,000.
5. Revenue from the hospital gift shop was Php31,000 and from the cafeteria revenues were Php160,000.
6. Incurred and paid nursing service costs of Php1,000,000 and general service costs of Php500,000.
Required:
Make journal entries for the aforementioned transactions.
Transcribed Image Text:Exercise 7
Prepare journal entries to record the following transactions for a private, non-profit university.
1.
Tuition and fees assessed total Php10,000,000, 85% of which was collected by year-end; tuition scholarships were granted for
Php800,000, and Php400,000 was expected to be uncollectible.
2.
Revenues collected from sales and services by the university bookstore were Php1,000,000.
3.
4.
5.
Salaries and wages were Php5,000,000, Php200,000 of which was for employees of the university bookstore.
Financial aid funds of Php500,000 were received from the Pell Grant program; the funds were then disbursed to the appropriate
students.
Contributions of Php250,000 were received; Php50,000 was restricted for the athletic department and Php200,000 was
unrestricted. An additional Php25,000 was pledged to the athletic department by the alumni.
6. Athletic equipment was purchased with Php35,000 previously set aside for that purpose.
Exercise 8
A private, non-profit university received donations of Php2,000,000 in 2005 that were restricted to certain research projects on zero
gravity material science. The university incurred Php1,150,000 of expenses on this research in 2005.
In 2005, an alumnus contributed a Php1,000,000 endowment for genetic research with all endowment income restricted for that
purpose. Income totaled Php50,000 for the year and zero gravity research expenses were Php44,000.
Required:
Prepare the appropriate journal entries for the university.
Exercise 9
The following information is available about the operations for a private, non-profit university.
1. The university sold Php9,000,000 of 8% bonds to finance the construction of a new building for the business school. The bonds
were sold on January 1 and pay interest on December 31 of each year. The bonds were sold at par and mature in 20 years.
2. The university received Php2,500,000 in alumni donations for the new business school building.
3. The building was constructed at a total cost of Php10,500,000 and the contractor was paid in full.
4. Interest was paid on the bonds.
5. Depreciation on the new building was Php50,000.
Required:
Prepare the appropriate journal entries for the university.
Exercise 10
A private, non-profit university received donations of Php500,000 in 2005 that were restricted to capital improvements of the
football stadium. The university spent Php650,000 on capital improvements for the stadium in 2005 and recorded depreciation of
Php51,000.
In 2005, an alumnus contributed a Php2,500,000 endowment for football scholarships with all endowment income restricted for
that purpose. Income totaled Php201,000 for the year and scholarship awards were Php299,000.
Required:
Prepare the appropriate journal entries for the university.
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