Journal entries for a nonprofit Fruits & Veggies, a nonprofit, conducts two types of programs: education and research. It does not use fund accounting. During 2018, the following transactions and events took place. Prepare journal entries for these transactions, identifying increases and decreases by net asset classification as appropriate. 1. Pledges amounting to $200,000 were received, to be used for any purpose designated by the trustees. Fruits & Veggies normally collects 90 percent of the amount pledged. 2. Fruits & Veggies collected $190,000 in cash on the amount pledged in the previous transaction. It wrote off the balance as uncollectible. 3. Ed Victor donated $5,000 cash in 2018, stipulating that it could be used for any purpose, but only during 2019. 4. Howard Gore donated $675,000, stipulating that the donation must be used solely to purchase a building that Fruits & Veggies could use for research. 5. Fruits & Veggies invested $20,000 of unrestricted resources in equity securities. Earnings on these resources amounted to $1,000 in 2018. 6. Late in the year, Fruits & Veggies used Howard Gore’s donation (see Transaction 4) and unrestricted resources of $140,000 to purchase a building for research purposes. 7. The following services were donated to Fruits & Veggies: a. Audit of the financial statements by an accounting firm—$5,000 b. Professional services by an advertising agency in connection with a fundraising campaign—$3,000 c. Ushering services at educational meetings, provided by high school students. If paid for, these services would cost $1,000. 8. At year-end, the investments referred to in Transaction 5 had a fair value of $22,000.
Fruits & Veggies, a nonprofit, conducts two types of programs: education and research. It does not use fund accounting. During 2018, the following transactions and events took place. Prepare journal entries for these transactions, identifying increases and decreases by net asset classification as appropriate.
1. Pledges amounting to $200,000 were received, to be used for any purpose designated by the trustees. Fruits & Veggies normally collects 90 percent of the amount pledged.
2. Fruits & Veggies collected $190,000 in cash on the amount pledged in the previous transaction. It wrote off the balance as uncollectible.
3. Ed Victor donated $5,000 cash in 2018, stipulating that it could be used for any purpose, but only during 2019.
4. Howard Gore donated $675,000, stipulating that the donation must be used solely to purchase a building that Fruits & Veggies could use for research.
5. Fruits & Veggies invested $20,000 of unrestricted resources in equity securities. Earnings on these resources amounted to $1,000 in 2018.
6. Late in the year, Fruits & Veggies used Howard Gore’s donation (see Transaction 4) and unrestricted resources of $140,000 to purchase a building for research purposes.
7. The following services were donated to Fruits & Veggies:
a. Audit of the financial statements by an accounting firm—$5,000
b. Professional services by an advertising agency in connection with a fundraising campaign—$3,000
c. Ushering services at educational meetings, provided by high school students. If paid for, these services would cost $1,000.
8. At year-end, the investments referred to in Transaction 5 had a fair value of $22,000.
9. Fruits & Veggies conducted a fundraising campaign, the donations to be used solely for research into the health benefits of asparagus. Donations totaled $45,000 in cash.
10. The Board of Directors of Fruits & Veggies designated $35,000 for the acquisition of research equipment.
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