Recording journal entries for nonprofits Prepare journal entries to record the following transactions. 1. Donor A gave the nonprofit a cash gift of $50,000 in June 2019, telling the nonprofit the gift could not be used until 2020. (Identify the affected net asset classification(s) in the journal entries made both in June 2019 and at the start of 2020.) 2. Attorney Howard Gorman volunteered his services to Taconic Singers, a nonprofit. He spent 12 hours preparing contracts for the services of professional singers and 8 hours serving as an usher before performances. Gorman normally gets $200 an hour for legal services, and Taconic normally pays $8 an hour when it hires ushers. 3. Donor B sent a letter to a nonprofit, saying she would donate $20,000 in cash to the nonprofit, to be used for any purpose the nonprofit's trustees desired, provided the nonprofit raised an equal amount of cash from other donors. 4. Regarding the previous transaction, the nonprofit raised $23,000 in cash from other donors and then notified Donor B of its success in meeting her condition for the gift. 5. Donor C donates to a local museum a work of art having a fair value of $5,000, with the understanding that the museum will sell it at auction and use the funds for its general activities. 6. Donor D advises a university that he has established an irrevocable charitable remainder trust, administered by his attorney, whereby his wife will receive income from the trust as long as she lives. At her death, the remaining trust assets will be distributed to the university as a permanent endowment. The university's actuary estimates the fair value of the university's beneficial interest to be $400,000. 7. As of December 31, 2019, the fair value of investments held in perpetuity by a nonprofit had increased by $30,000. If a transaction doesn't require a journal entry select No entry as your answer and leave the Debit and Credit answer boxes blank (zero).
Recording journal entries for nonprofits Prepare journal entries to record the following transactions. 1. Donor A gave the nonprofit a cash gift of $50,000 in June 2019, telling the nonprofit the gift could not be used until 2020. (Identify the affected net asset classification(s) in the journal entries made both in June 2019 and at the start of 2020.) 2. Attorney Howard Gorman volunteered his services to Taconic Singers, a nonprofit. He spent 12 hours preparing contracts for the services of professional singers and 8 hours serving as an usher before performances. Gorman normally gets $200 an hour for legal services, and Taconic normally pays $8 an hour when it hires ushers. 3. Donor B sent a letter to a nonprofit, saying she would donate $20,000 in cash to the nonprofit, to be used for any purpose the nonprofit's trustees desired, provided the nonprofit raised an equal amount of cash from other donors. 4. Regarding the previous transaction, the nonprofit raised $23,000 in cash from other donors and then notified Donor B of its success in meeting her condition for the gift. 5. Donor C donates to a local museum a work of art having a fair value of $5,000, with the understanding that the museum will sell it at auction and use the funds for its general activities. 6. Donor D advises a university that he has established an irrevocable charitable remainder trust, administered by his attorney, whereby his wife will receive income from the trust as long as she lives. At her death, the remaining trust assets will be distributed to the university as a permanent endowment. The university's actuary estimates the fair value of the university's beneficial interest to be $400,000. 7. As of December 31, 2019, the fair value of investments held in perpetuity by a nonprofit had increased by $30,000. If a transaction doesn't require a journal entry select No entry as your answer and leave the Debit and Credit answer boxes blank (zero).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Ref.
Description
Debit
Credit
1
Cash
50,000
Contribution revenue-Donor support with time restrictions
50,000 v
To record receipt of contribution from Donor A.
Net assets with donor restrictions-Reclassifications out -Satisfaction of time restrictions
50,000 v
Net assets without donor restrictions - Reclassifications in - Satisfaction of time restrictio
50,000 v
To record satisfaction of restriction on contribution in 2020.
2
Administrative expenses
2,400 v
Donated services-Support without donor restrictions
2,400 v
To record donation of legal services.
No entry
No entry
To record donation of usher services.
3
No entry
No entry
4
Cash
23,000 v
Contributed art (without donor restrictions)
23,000 v
To record receipt of cash contributions.
Contributions receivable - charitable remainder trust
20,000 v
Contributed art (without donor restrictions)
20,000 v
To record promise to give from Donor B.
Art works held for sale
5,000 v
Contributed art (without donor restrictions)
5,000 v
6
Contributions receivable - charitable remainder trust
400,000 v
Contribution revenue-Support with donor restrictions
400,000 v
7
Investments
30,000 v
Unrealized and realized gains and losses on Investments with donor restrictions
30,000 v
Transcribed Image Text:Recording journal entries for nonprofits
Prepare journal entries to record the following transactions.
1. Donor A gave the nonprofit a cash gift of $50,000 in June 2019, telling the nonprofit the gift could not be used until 2020. (Identify the affected net asset classification(s) in the journal entries
made both in June 2019 and at the start of 2020.)
2. Attorney Howard Gorman volunteered his services to Taconic Singers, a nonprofit. He spent 12 hours preparing contracts for the services of professional singers and 8 hours serving as an usher before
performances. Gorman normally gets $200 an hour for legal services, and Taconic normally pays $8 an hour when it hires ushers.
3. Donor B sent a letter to a nonprofit, saying she would donate $20,000 in cash to the nonprofit, to be used for any purpose the nonprofit's trustees desired, provided the nonprofit raised an equal amount of
cash from other donors.
4. Regarding the previous transaction, the nonprofit raised $23,000 in cash from other donors and then notified Donor B of its success in meeting her condition for the gift.
5. Donor C donates to a local museum a work of art having a fair value of $5,000, with the understanding that the museum will sell it at auction and use the funds for its general activities.
6. Donor D advises a university that he has established an irrevocable charitable remainder trust, administered by his attorney, whereby his wife will receive income from the trust as long as she lives. At her
death, the remaining trust assets will be distributed to the university as a permanent endowment. The university's actuary estimates the fair value of the university's beneficial interest to be $400,000.
7. As of December 31, 2019, the fair value of investments held in perpetuity by a nonprofit had increased by $30,000.
If a transaction doesn't require a journal entry select No entry as your answer and leave the Debit and Credit answer boxes blank (zero).
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