INVOLVE was incorporated as a not-for-profit organization on January 1, 2023. During the fiscal year ended December 31, 2023, the following transactions occurred. 1. A business donated rent-free office space to the organization that would normally rent for $35,600 a year. 2. A fund drive raised $188,000 in cash and $106,000 in pledges that will be paid next year. A state government grant of $156,000 was received for program operating costs related to public health education. 3. Salaries and fringe benefits paid during the year amounted to $209,160. At year-end, an additional $16,600 of salaries and fringe benefits were accrued. 4. A donor pledged $106,000 for construction of a new building, payable over five fiscal years, commencing in 2025. The discounted value of the pledge is expected to be $94,860. 5. Office equipment was purchased for $12,600. The useful life of the equipment is estimated to be five years. Office furniture with a fair value of $10,200 was donated by a local office supply company. The furniture has an estimated useful life of 10 years. Furniture and equipment are considered net assets without donor restrictions by INVOLVE. 6. Telephone expense for the year was $5,800, printing and postage expense was $12,600 for the year, utilities for the year were $8,900 and supplies expense was $4,900 for the year. At year-end, an immaterial amount of supplies remained on hand and the balance in accounts payable was $4,200. 7. Volunteers contributed $15,600 of time to help with answering the phones, mailing materials, and various other clerical activities. 8. It is estimated that 90 percent of the pledges made for the 2024 year will be collected. Depreciation expense is recorded for the full year on the assets recorded in item 5. 9. All expenses were allocated to program services and support services in the following percentages: public health education, 35 percent; community service, 30 percent; management and general, 20 percent; and fund-raising, 15 percent. 10. Net assets were released to reflect satisfaction of state grant requirements that the grant resources be used for public health education program purposes. 11. All nominal accounts were closed to the appropriate net asset accounts. Exercise 14-24 (Algo) Part a Required a. Prepare journal entries to record these transactions. Expense transactions should be initially recorded by object classification; 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. Round the intermediate and final answers to the nearest dollar amount.) No Transaction A 01 Rent Expense General Journal Debit Credit 35,600 Contributions-Without Donor Restrictions 35,600 B 02 Cash 344,000 Contributions Receivable 106,000 Contributions-Without Donor Restrictions 188,000 Contributions-With Donor Restrictions-Program 156,000 C 03 Salaries and Benefits Expense 225,760 Cash 209,160 Salaries and Benefits Payable 16,600 D 04 Contributions Receivable 106,000 Contributions-With Donor Restrictions-Time 94,860 Discount on Contributions Receivable 11,140 F 06 Telephone Expense Printing and Postage Expense Utilities Expense Supplies Expense Cash Accounts Payable E 05 Equipment and Furniture Cash Contributions-Without Donor Restrictions 22,800 12,600 10,200 5,800 12,600 8,900 4,900 28,000 4,200 G 07 No Journal Entry Required H 8(a) Provision for Uncollectible Pledges 10,600 Allowance for Uncollectible Pledges 10,600 Accounts Payable Cash

INVOLVE was incorporated as a not-for-profit organization on January 1, 2023. During the fiscal year ended December 31, 2023, the following transactions occurred. 1. A business donated rent-free office space to the organization that would normally rent for $35,600 a year. 2. A fund drive raised $188,000 in cash and $106,000 in pledges that will be paid next year. A state government grant of $156,000 was received for program operating costs related to public health education. 3. Salaries and fringe benefits paid during the year amounted to $209,160. At year-end, an additional $16,600 of salaries and fringe benefits were accrued. 4. A donor pledged $106,000 for construction of a new building, payable over five fiscal years, commencing in 2025. The discounted value of the pledge is expected to be $94,860. 5. Office equipment was purchased for $12,600. The useful life of the equipment is estimated to be five years. Office furniture with a fair value of $10,200 was donated by a local office supply company. The furniture has an estimated useful life of 10 years. Furniture and equipment are considered net assets without donor restrictions by INVOLVE. 6. Telephone expense for the year was $5,800, printing and postage expense was $12,600 for the year, utilities for the year were $8,900 and supplies expense was $4,900 for the year. At year-end, an immaterial amount of supplies remained on hand and the balance in accounts payable was $4,200. 7. Volunteers contributed $15,600 of time to help with answering the phones, mailing materials, and various other clerical activities. 8. It is estimated that 90 percent of the pledges made for the 2024 year will be collected. Depreciation expense is recorded for the full year on the assets recorded in item 5. 9. All expenses were allocated to program services and support services in the following percentages: public health education, 35 percent; community service, 30 percent; management and general, 20 percent; and fund-raising, 15 percent. 10. Net assets were released to reflect satisfaction of state grant requirements that the grant resources be used for public health education program purposes. 11. All nominal accounts were closed to the appropriate net asset accounts. Exercise 14-24 (Algo) Part a Required a. Prepare journal entries to record these transactions. Expense transactions should be initially recorded by object classification; 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. Round the intermediate and final answers to the nearest dollar amount.) No Transaction A 01 Rent Expense General Journal Debit Credit 35,600 Contributions-Without Donor Restrictions 35,600 B 02 Cash 344,000 Contributions Receivable 106,000 Contributions-Without Donor Restrictions 188,000 Contributions-With Donor Restrictions-Program 156,000 C 03 Salaries and Benefits Expense 225,760 Cash 209,160 Salaries and Benefits Payable 16,600 D 04 Contributions Receivable 106,000 Contributions-With Donor Restrictions-Time 94,860 Discount on Contributions Receivable 11,140 F 06 Telephone Expense Printing and Postage Expense Utilities Expense Supplies Expense Cash Accounts Payable E 05 Equipment and Furniture Cash Contributions-Without Donor Restrictions 22,800 12,600 10,200 5,800 12,600 8,900 4,900 28,000 4,200 G 07 No Journal Entry Required H 8(a) Provision for Uncollectible Pledges 10,600 Allowance for Uncollectible Pledges 10,600 Accounts Payable Cash

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter28: Income Taxation Of Trusts And Estates

Section: Chapter Questions

Problem 9DQ

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