### Financial Statements of Help & Save and Swim For SafetyIn January 2020, two private not-for-profit entities, Help & Save in Kansas and Swim For Safety in Missouri, decided to combine forces to enhance the impact of their operations. Below are their statements of financial position as of January 1, 2020.#### HELP & SAVE**Statement of Financial Position**- **Assets** - Cash: $1,800,000 - Contributions receivable (net): $110,000 - Investments: $400,000 - Buildings & equipment (net): $800,000 - **Total assets: $3,110,000**- **Liabilities** - Accounts payable and accrued liabilities: $210,000 - Notes payable: $1,200,000 - **Total liabilities: $1,410,000**- **Net Assets** - Net assets without donor restrictions: $1,300,000 - Net assets with donor restrictions: $400,000 - **Total net assets: $1,700,000**- **Total liabilities and net assets: $3,110,000**#### SWIM FOR SAFETY**Statement of Financial Position**- **Assets** - Cash: $700,000 - Contributions receivable (net): $250,000 - Investments: $270,000 - Buildings & equipment (net): $690,000 - **Total assets: $1,910,000**- **Liabilities** - Accounts payable and accrued liabilities: $270,000 - Notes payable: $720,000 - **Total liabilities: $990,000**- **Net Assets** - Net assets without donor restrictions: $520,000 - Net assets with donor restrictions: $400,000 - **Total net assets: $920,000**- **Total liabilities and net assets: $1,910,000**#### Additional Information- The buildings and equipment held by Help & Save have a fair value of $1,020,000.- Swim For Safety's buildings and equipment have a fair value of $810,000.These statements provide a detailed overview of the financial positions of both organizations as they evaluate strategies for a successful merger. **Help & Save: Statement of Financial Position (January 1, 2020)**This statement outlines the financial position of Help & Save as of January 1, 2020. It lists all assets, liabilities, and net assets to provide a snapshot of the organization’s financial standing.**Assets:**- Cash- Contributions receivable (net)- Investments- Buildings & equipment (net)- Goodwill- **Total assets:** $0**Liabilities:**- Accounts payable and accrued liabilities- Notes payable- **Total liabilities:** $0**Net Assets:**- Net assets without donor restrictions- Net assets with donor restrictions- **Total net assets:** $0**Total liabilities and net assets:** $0_Note: The scenario assumes $1.20 million will be spent in cash from net assets without donor restrictions to gain control over Swim For Safety._

Following are the balances that will appear on the statement of financial position immediately after control is gained : In this Case Goodwill would be recognised as follows : $1,080,000

Help & Save is a private not-for-profit entity that operates in Kansas. Swim For Safety is a private not-for- profit entity that operates in Missouri. The leaders of these two organizations have decided to combine forces on January 1, 2020, in order to have a bigger impact from their work. They are currently discussing ways by which this combination can be created. The following are statements of financial position for both charities at that date. HELP & SAVE Statement of Financial Position January 1, 2020 Assets $1,800,000 110,000 400,000 800,000 $3,110,000 Cash Contributions receivable (net) Investments Buildings & equipment (net) Total assets Liabilities Accounts payable and accrued liabilities Notes payable $210,000 1,200,000 $1,410,000 Total liabilities Net Assets $1,300,000 400,000 $1,700,000 $3,110,000 Net assets without donor restrictions Net assets with donor restrictions Total net assets Total liabilities and net assets SWIM FOR SAFETY Statement of Financial Position January 1, 2020 Assets Cash $700,000 250,000 270,000 690,000 $1,910,000 Contributions receivable (net) Investments Buildings & equipment (net) Total assets Liabilities Accounts payable and accrued liabilities Notes payable $270,000 720,000 $990,000 Total liabilities Net Assets $520,000 400,000 $920,000 $1,910,000 Net assets without donor restrictions Net assets with donor restrictions Total net assets Total liabilities and net assets The buildings and equipment reported by Help & Save have a fair value of $1,020,000. The buildings and equipment reported by Swim For Safety have a fair value of $810,000.

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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