← Module Six Problem Set Question 7 of 10 View Policies < > -/5 !!! Current Attempt in Progress On January 1, 2025, a new Board of Directors was elected for Crane Hospital. The new board switched to a different accountant. After reviewing the hospital's books, the accountant decided that the accounts should be adjusted. Effective January 1, 2025, the board decided that 1. 2. Separate funds should be established for the General Fund, the Crane Endowment Fund, and the Plant Replacement and Expansion Fund (the old balances will be reversed to eliminate them). The accounts should be maintained in accordance with fund accounting principles. The balances in the general ledger at January 1, 2025, are presented here: Cash Investment in U.S. treasury bills Investment in common stock Interest receivable Accounts receivable Inventory Land Building Equipment Allowance for depreciation Accounts payable Bank loan Endowment fund balance a Other fund balances Total a ہے ہے ہے $ 45,000 114,000 417,000 3,000 41,000 27,000 375,000 261,000 274,000 $365,000 65,000 155,000 130.000 842,000 $1,557,000 $1,557,000 The following additional information is available: 1. Under the terms of the will of J. Ethington, founder of the hospital, "The principal of the bequest is to be fully invested in trust forevermore in mortgages secured by productive real estate in Central City and/or in U.S. Government securities... and the income therefrom is to be used to defray current expenses." 2. The Endowment Fund consists of the following: Cash received in 1912 by bequest from Ethington $88,000 Net gains realized from 1956 through 1989 from the sale of real estate acquired in mortgage foreclosures 26,000 Income received from 1990 through 2024 from 90-day U.S. treasury bill investments a Balance per general ledger on January 1, 2025 16,000 $130,000 3. The land account balance is composed of A 1912 appraisal of land at $9,000 and building at $6,000, received by donation at that time. The building was demolished in 1934 ཀ Appraisal increase based on insured value in land title policies issued in 1954 تر نہ نہ نہ نہ a Landscaping costs for trees planted Balance per general ledger on January 1, 2025 $ 15,000 348,000 12,000 $375,000 4. The building balance is composed of ༩ Cost of present hospital building completed in January 1985, when the hospital commenced operations $310,000 ༩ Adjustment to record appraised value of building in 1994 a Cost of elevator installed in hospital building in January 2010 Balance per general ledger on January 1, 2025 (97,000) 48,000 $261,000 a 5. a 6. 7. ༩ The estimated useful lives of the hospital building and the elevator when new were 50 years (9 years remaining) and 20 years (5 years remaining), respectively. The hospital's equipment was inventoried on January 1, 2025. The costs shown in the inventory agreed with the equipment account balance in the general ledger. The allowance for depreciation account at January 1, 2025, included $160,000 applicable to equipment, and that amount was determined to be accurate. All depreciation is computed on a straight-line basis. A bank loan was obtained to finance the cost of new operating room equipment purchased in 2021. Interest was paid to December 31, 2024. Common stock with a market value of $417,000 was donated to Crane Hospital with the stipulation that the proceeds from the sale of the stock must be used for facilities expansion. The hospital plans to undertake expansion of its facilities next year and to sell these securities at that time. a Using the workpaper form below, prepare the entries necessary to establish the correct balances as of January 1, 2025. a Trial Balance Account Description Debit Credit Adjustments Debit Credit General Fund Debit Credit Cash $ $ $ $ S $ ہے ہے ہے ہے ہے ہے ہے ہے ہے Investment in U.S. Treasury Bills Investment in Common Stock Interest Receivable Accounts Receivable Inventory Land ༩ Buildings Equipment Allowance for Depreciation Accounts Payable Bank Loan Endowment Fund a Other Fund Balance ہے ہے یہ ہے ہے a Totals List of Accounts Accounts Payable Accounts Receivable Accrued Expenses Allowance for Depreciation ༩ Allowance for Doubtful Accounts Allowance for Doubtful Pledges Allowance for Uncollectible Loans ༩ Annuity Payable ہے ہے یہ ہے ہے ہے ༢ Assets Whose Use is Limited Bad Debt Expense Bank Loan Book Rentals and Fines Revenue Buildings Cash Circulating Library Expenses Community Services Expenses Construction in Process Contribution Revenue Deferred Revenue Deferred Support Donated Services Due from Annuity Fund Due from Endowment Fund Due to General Fund Due to Loan Fund a Due to Restricted Current Fund ༩༽ Due to Specific Purpose Fund Due to Unexpended Plant Fund Due to Unrestricted Current Fund a ༩ ہے ہے ہے ہے ہے ہے ہے ہے ہے ہے a $ Educational and General Expenses Endowment Fund Endowment Income Equipment Excess of Restricted Receipts Over Transfers to Revenue Excess of Revenue Over Expenses Exhibits Expenses Expenses Fund Balance Fund Balance-Term Fund Raising Expenses Gain from Operations General and Administrative Expenses General Fund General Service Expenses Grants Receivable Income from Board - Designated Funds Interest Income Interest on Deferred Tuition Interest Receivable Inventory Investment in Common Stock Investment in Savings Certificates Investment in U.S. Treasury Bills Investment Income Investments ཀ ہے ہے یہ ہے ہے ہے a a a Land Loan Receivable Long-term Debt Loss from Operations Mortgage Payable Net Assets Released from Restrictions Net Investment in Plant No Entry a Other Assets Other Fund Balance ཀ Other Operating Revenue a a a ی به ہے به به ہے ہے ہے ہے ཀ ༩༽ a ༩ a ཀ ہے ہے ہے a Other Professional Services - Research Operating Expenses Patient Service Revenue Plant Fund Plant Replacement Fund Poetry Collection Expenses Prepaid Expenses Private Gifts and Grants Provision for Uncollectible Pledges Expenses Realized Gains on Investments Research Library Expenses Restricted Fund Revenues Scholarship Expenses Service Fees Revenue State Appropriation Receivable State Appropriations Revenue Support Revenue-Gifts Support Revenue-Grants Tuition and Fees Revenue Unrestricted Current Fund Revenues Unrestricted Fund Unrestricted Gifts and Requests Unrestricted Income from Endowment Funds Work in Process Save for Later Last saved 1 second ago. $ $ $ Saved work will be auto-submitted on the due date. 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← Module Six Problem Set Question 7 of 10 View Policies < > -/5 !!! Current Attempt in Progress On January 1, 2025, a new Board of Directors was elected for Crane Hospital. The new board switched to a different accountant. After reviewing the hospital's books, the accountant decided that the accounts should be adjusted. Effective January 1, 2025, the board decided that 1. 2. Separate funds should be established for the General Fund, the Crane Endowment Fund, and the Plant Replacement and Expansion Fund (the old balances will be reversed to eliminate them). The accounts should be maintained in accordance with fund accounting principles. The balances in the general ledger at January 1, 2025, are presented here: Cash Investment in U.S. treasury bills Investment in common stock Interest receivable Accounts receivable Inventory Land Building Equipment Allowance for depreciation Accounts payable Bank loan Endowment fund balance a Other fund balances Total a ہے ہے ہے $ 45,000 114,000 417,000 3,000 41,000 27,000 375,000 261,000 274,000 $365,000 65,000 155,000 130.000 842,000 $1,557,000 $1,557,000 The following additional information is available: 1. Under the terms of the will of J. Ethington, founder of the hospital, "The principal of the bequest is to be fully invested in trust forevermore in mortgages secured by productive real estate in Central City and/or in U.S. Government securities... and the income therefrom is to be used to defray current expenses." 2. The Endowment Fund consists of the following: Cash received in 1912 by bequest from Ethington $88,000 Net gains realized from 1956 through 1989 from the sale of real estate acquired in mortgage foreclosures 26,000 Income received from 1990 through 2024 from 90-day U.S. treasury bill investments a Balance per general ledger on January 1, 2025 16,000 $130,000 3. The land account balance is composed of A 1912 appraisal of land at $9,000 and building at $6,000, received by donation at that time. The building was demolished in 1934 ཀ Appraisal increase based on insured value in land title policies issued in 1954 تر نہ نہ نہ نہ a Landscaping costs for trees planted Balance per general ledger on January 1, 2025 $ 15,000 348,000 12,000 $375,000 4. The building balance is composed of ༩ Cost of present hospital building completed in January 1985, when the hospital commenced operations $310,000 ༩ Adjustment to record appraised value of building in 1994 a Cost of elevator installed in hospital building in January 2010 Balance per general ledger on January 1, 2025 (97,000) 48,000 $261,000 a 5. a 6. 7. ༩ The estimated useful lives of the hospital building and the elevator when new were 50 years (9 years remaining) and 20 years (5 years remaining), respectively. The hospital's equipment was inventoried on January 1, 2025. The costs shown in the inventory agreed with the equipment account balance in the general ledger. The allowance for depreciation account at January 1, 2025, included $160,000 applicable to equipment, and that amount was determined to be accurate. All depreciation is computed on a straight-line basis. A bank loan was obtained to finance the cost of new operating room equipment purchased in 2021. Interest was paid to December 31, 2024. Common stock with a market value of $417,000 was donated to Crane Hospital with the stipulation that the proceeds from the sale of the stock must be used for facilities expansion. The hospital plans to undertake expansion of its facilities next year and to sell these securities at that time. a Using the workpaper form below, prepare the entries necessary to establish the correct balances as of January 1, 2025. a Trial Balance Account Description Debit Credit Adjustments Debit Credit General Fund Debit Credit Cash $ $ $ $ S $ ہے ہے ہے ہے ہے ہے ہے ہے ہے Investment in U.S. Treasury Bills Investment in Common Stock Interest Receivable Accounts Receivable Inventory Land ༩ Buildings Equipment Allowance for Depreciation Accounts Payable Bank Loan Endowment Fund a Other Fund Balance ہے ہے یہ ہے ہے a Totals List of Accounts Accounts Payable Accounts Receivable Accrued Expenses Allowance for Depreciation ༩ Allowance for Doubtful Accounts Allowance for Doubtful Pledges Allowance for Uncollectible Loans ༩ Annuity Payable ہے ہے یہ ہے ہے ہے ༢ Assets Whose Use is Limited Bad Debt Expense Bank Loan Book Rentals and Fines Revenue Buildings Cash Circulating Library Expenses Community Services Expenses Construction in Process Contribution Revenue Deferred Revenue Deferred Support Donated Services Due from Annuity Fund Due from Endowment Fund Due to General Fund Due to Loan Fund a Due to Restricted Current Fund ༩༽ Due to Specific Purpose Fund Due to Unexpended Plant Fund Due to Unrestricted Current Fund a ༩ ہے ہے ہے ہے ہے ہے ہے ہے ہے ہے a $ Educational and General Expenses Endowment Fund Endowment Income Equipment Excess of Restricted Receipts Over Transfers to Revenue Excess of Revenue Over Expenses Exhibits Expenses Expenses Fund Balance Fund Balance-Term Fund Raising Expenses Gain from Operations General and Administrative Expenses General Fund General Service Expenses Grants Receivable Income from Board - Designated Funds Interest Income Interest on Deferred Tuition Interest Receivable Inventory Investment in Common Stock Investment in Savings Certificates Investment in U.S. Treasury Bills Investment Income Investments ཀ ہے ہے یہ ہے ہے ہے a a a Land Loan Receivable Long-term Debt Loss from Operations Mortgage Payable Net Assets Released from Restrictions Net Investment in Plant No Entry a Other Assets Other Fund Balance ཀ Other Operating Revenue a a a ی به ہے به به ہے ہے ہے ہے ཀ ༩༽ a ༩ a ཀ ہے ہے ہے a Other Professional Services - Research Operating Expenses Patient Service Revenue Plant Fund Plant Replacement Fund Poetry Collection Expenses Prepaid Expenses Private Gifts and Grants Provision for Uncollectible Pledges Expenses Realized Gains on Investments Research Library Expenses Restricted Fund Revenues Scholarship Expenses Service Fees Revenue State Appropriation Receivable State Appropriations Revenue Support Revenue-Gifts Support Revenue-Grants Tuition and Fees Revenue Unrestricted Current Fund Revenues Unrestricted Fund Unrestricted Gifts and Requests Unrestricted Income from Endowment Funds Work in Process Save for Later Last saved 1 second ago. $ $ $ Saved work will be auto-submitted on the due date. Auto-submission can take up to 10 minutes. Assistance Used Attempts: 0 of 2 used Submit Answer

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter23: Exempt Entities

Section: Chapter Questions

Problem 6RP

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