!Required informationProblem 18-45 (Static) (LO 18-1, 18-2, 18-4, 18-5, 18-8)[The following information applies to the questions displayed below.]For a number of years, a private not-for-profit entity has been preparing financialstatements that do not necessarily conform to U.S. generally accepted accountingprinciples. At the end of the most recent year (Year 2), those financial statements showtotal assets of $900,000, total liabilities of $100,000, net assets without donor restrictionof $400,000, and net assets with donor restrictions of $400,000. This last category iscomposed of $300,000 in net assets with purpose restrictions and $100,000 in netassets that must be permanently held. At the end of Year 1, financial statements showtotal assets of $700,000, total liabilities of $60,000, net assets without donor restrictionof $340,000, and net assets with donor restrictions of $300,000. This last category iscomposed of $220,000 in net assets with purpose restrictions and $80,000 in net assetsthat must be permanently held. Total expenses for Year 2 were $500,000 and reportedunder net assets without donor restrictions. Each part that follows should be viewed as anindependent situation. Assume that, at the beginning of Year 1, the entity received $50,000 in cash as a donation with thestipulation that the money be used to buy a bus or be returned to the donor. At that time, the entityincreased cash and increased contributed revenue under net assets with donor restrictions. On the firstday of Year 2, the $50,000 was spent on the bus. The entity reclassified $50,000 from net assets withdonor restrictions to net assets without donor restrictions. At the end of Year 2, the entity recorded $5,000as depreciation expense, a figure that was shown as a reduction under net assets without donorrestrictions.Required:a. What was the appropriate amount of net assets with donor restrictions to be reported at the end of Year1?Net assets with donor restrictions to be reported at the end of Year 1b. What was the appropriate amount of net assets without donor restrictions to be reported at the end ofYear 2?Net assets without donor restrictions to be reported at the end of Year 2c. What was the appropriate amount of expenses to be reported under net assets without donorrestrictions for the year ending December 31, Year 2?Expenses to be reportedd. What was the appropriate amount of net assets with donor restrictions to be reported at the end of Year2?Net assets with donor restrictions to be reported at the end of Year 2

GAAP Apply to Nonprofit Organizations , Accounting Standards Codification generally applies to…

For a number of years, a private not-for-profit entity has been preparing financial statements that do not necessarily conform to U.S. generally accepted accounting principles. At the end of the most recent year (Year 2), those financial statements show total assets of $900,000, total liabilities of $100,000, net assets without donor restriction of $400,000, and net assets with donor restrictions of $400,000. This last category is composed of $300,000 in net assets with purpose restrictions and $100,000 in net assets that must be permanently held. At the end of Year 1, financial statements show total assets of $700,000, total liabilities of $60,000, net assets without donor restriction of $340,000, and net assets with donor restrictions of $300,000. This last category is composed of $220,000 in net assets with purpose restrictions and $80,000 in net assets that must be permanently held. Total expenses for Year 2 were $500,000 and reported under net assets without donor restrictions. Each part that follows should be viewed as an independent situation.

For a number of years, a private not-for-profit entity has been preparing financial statements that do not necessarily conform to U.S. generally accepted accounting principles. At the end of the most recent year (Year 2), those financial statements show total assets of $900,000, total liabilities of $100,000, net assets without donor restriction of $400,000, and net assets with donor restrictions of $400,000. This last category is composed of $300,000 in net assets with purpose restrictions and $100,000 in net assets that must be permanently held. At the end of Year 1, financial statements show total assets of $700,000, total liabilities of $60,000, net assets without donor restriction of $340,000, and net assets with donor restrictions of $300,000. This last category is composed of $220,000 in net assets with purpose restrictions and $80,000 in net assets that must be permanently held. Total expenses for Year 2 were $500,000 and reported under net assets without donor restrictions. Each part that follows should be viewed as an independent situation.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following information relates to Problems 48 through 53: For a number of years, a private not-for-profit entity has been preparing financial statements that do not necessarily follow generally accepted accounting principles. At the end of the most recent year (Year 2), those financial statements show total assets of $900,000, total liabilities of $100,000, total unrestricted net assets of $400,000, total temporarily restricted net assets of $300,000, and total permanently restricted net assets of $100,000. In addition, total expenses for the year were $500,000 (shown in unrestricted net assets). At the beginning of Year 1, the entity above received $50,000 in cash as a gift with the stipulation that the money be used to buy a bus. The accountant made the appropriate entry at that time. On the first day of Year 2, the entity spent the $50,000 for the bus, an asset that will last for 10 years and will have no salvage value. Because the money came from an outside donor, entity…
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