Required information Problem 18-45 (Static) (LO 18-1, 18-2, 18-4, 18-5, 18-8) [The following information applies to the questions displayed below.] For a number of years, a private not-for-profit entity has been preparing financial statements that do not necessarily conform to U.S. generally accepted accounting principles. At the end of the most recent year (Year 2), those financial statements show total assets of $900,000, total liabilities of $100,000, net assets without donor restriction of $400,000, and net assets with donor restrictions of $400,000. This last category is composed of $300,000 in net assets with purpose restrictions and $100,000 in net assets that must be permanently held. At the end of Year 1, financial statements show total assets of $700,000, total liabilities of $60,000, net assets without donor restriction of $340,000, and net assets with donor restrictions of $300,000. This last category is composed of $220,000 in net assets with purpose restrictions and $80,000 in net assets that must be permanently held. Total expenses for Year 2 were $500,000 and reported under net assets without donor restrictions. Each part that follows should be viewed as an independent situation.
Required information Problem 18-45 (Static) (LO 18-1, 18-2, 18-4, 18-5, 18-8) [The following information applies to the questions displayed below.] For a number of years, a private not-for-profit entity has been preparing financial statements that do not necessarily conform to U.S. generally accepted accounting principles. At the end of the most recent year (Year 2), those financial statements show total assets of $900,000, total liabilities of $100,000, net assets without donor restriction of $400,000, and net assets with donor restrictions of $400,000. This last category is composed of $300,000 in net assets with purpose restrictions and $100,000 in net assets that must be permanently held. At the end of Year 1, financial statements show total assets of $700,000, total liabilities of $60,000, net assets without donor restriction of $340,000, and net assets with donor restrictions of $300,000. This last category is composed of $220,000 in net assets with purpose restrictions and $80,000 in net assets that must be permanently held. Total expenses for Year 2 were $500,000 and reported under net assets without donor restrictions. Each part that follows should be viewed as an independent situation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Required information
Problem 18-45 (Static) (LO 18-1, 18-2, 18-4, 18-5, 18-8)
[The following information applies to the questions displayed below.]
For a number of years, a private not-for-profit entity has been preparing financial
statements that do not necessarily conform to U.S. generally accepted accounting
principles. At the end of the most recent year (Year 2), those financial statements show
total assets of $900,000, total liabilities of $100,000, net assets without donor restriction
of $400,000, and net assets with donor restrictions of $400,000. This last category is
composed of $300,000 in net assets with purpose restrictions and $100,000 in net
assets that must be permanently held. At the end of Year 1, financial statements show
total assets of $700,000, total liabilities of $60,000, net assets without donor restriction
of $340,000, and net assets with donor restrictions of $300,000. This last category is
composed of $220,000 in net assets with purpose restrictions and $80,000 in net assets
that must be permanently held. Total expenses for Year 2 were $500,000 and reported
under net assets without donor restrictions. Each part that follows should be viewed as an
independent situation.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5bd24d5e-ed33-4881-8643-64f182425bac%2Fb71a6939-404e-4763-983c-15d9030eecb4%2Fmefb6aj_processed.png&w=3840&q=75)
Transcribed Image Text:!
Required information
Problem 18-45 (Static) (LO 18-1, 18-2, 18-4, 18-5, 18-8)
[The following information applies to the questions displayed below.]
For a number of years, a private not-for-profit entity has been preparing financial
statements that do not necessarily conform to U.S. generally accepted accounting
principles. At the end of the most recent year (Year 2), those financial statements show
total assets of $900,000, total liabilities of $100,000, net assets without donor restriction
of $400,000, and net assets with donor restrictions of $400,000. This last category is
composed of $300,000 in net assets with purpose restrictions and $100,000 in net
assets that must be permanently held. At the end of Year 1, financial statements show
total assets of $700,000, total liabilities of $60,000, net assets without donor restriction
of $340,000, and net assets with donor restrictions of $300,000. This last category is
composed of $220,000 in net assets with purpose restrictions and $80,000 in net assets
that must be permanently held. Total expenses for Year 2 were $500,000 and reported
under net assets without donor restrictions. Each part that follows should be viewed as an
independent situation.
![Assume that on January 1, Year 2, several supporters of the entity spent their own time and money to
construct a garage for the entity's vehicles. It was donated for free. The labor had a fair value of $20,000,
and the materials had a fair value of $50,000. It was expected to last for 10 years and have no residual
value. On that day, the entity increased its contributed support under net assets without donor restrictions
by $70,000 and increased its expenses under net assets without donor restrictions by the same amount.
No further entry has ever been made.
Required:
a. What was the appropriate amount of net assets without donor restrictions at the end of Year 2?
Net assets without donor restrictions at the end of Year 2
b. What was the appropriate amount of total assets at the end of Year 2?
Total assets at the end of Year 2
c. What was the appropriate amount of expenses for Year 2?
Appropriate amount of expenses](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5bd24d5e-ed33-4881-8643-64f182425bac%2Fb71a6939-404e-4763-983c-15d9030eecb4%2Fu0bizbn_processed.png&w=3840&q=75)
Transcribed Image Text:Assume that on January 1, Year 2, several supporters of the entity spent their own time and money to
construct a garage for the entity's vehicles. It was donated for free. The labor had a fair value of $20,000,
and the materials had a fair value of $50,000. It was expected to last for 10 years and have no residual
value. On that day, the entity increased its contributed support under net assets without donor restrictions
by $70,000 and increased its expenses under net assets without donor restrictions by the same amount.
No further entry has ever been made.
Required:
a. What was the appropriate amount of net assets without donor restrictions at the end of Year 2?
Net assets without donor restrictions at the end of Year 2
b. What was the appropriate amount of total assets at the end of Year 2?
Total assets at the end of Year 2
c. What was the appropriate amount of expenses for Year 2?
Appropriate amount of expenses
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