The Watson Foundation, a private not-for-profit entity, begins 2020 with:- Cash: $100,000- Contributions receivable (net): $200,000- Investments: $300,000- Land, buildings, and equipment (net): $200,000Net assets without donor restrictions are reported as $400,000, equal to the net assets with donor restrictions.Restricted Net Assets:- $300,000 for a new building and officer salaries with 50% designated for the building.- $100,000 permanently held, with income unrestricted.Program and Services:- One program service (health care)- Two supporting services (fundraising and administrative)Transactions for the Year:1. Interest of $20,000 computed on unrestricted contribution receivable.2. Received $100,000 from contributions receivable and wrote off $4,000 as uncollectible.3. Unrestricted cash donations: $180,000.4. Received $23,000 cash restricted for specific office machinery purchase next year.5. Paid $90,000 in salaries; $22,000 from restricted funds for health care work.6. Spent $23,000 on office machinery (as per point 4).7. Received $12,000 as a cash gift to convey to another charity but can redirect.8. Acquired a building for $500,000 using a long-term note and restricted funds.9. Received $30,000 in membership dues; substantial benefits provided.10. Unrestricted income of $47,000 that must be held permanently.11. Set aside $9,000 from investments for emergencies.12. Paid rent, advertising, and utilities totaling $43,000, allocated across services.13. Unrestricted pledge of $200,000 collected in five years; $149,000 present value.14. Distribution of depreciation expenses: $40,000 (60% health care, 30% admin, 10% fundraising).15. Paid $15,000 in note interest (acquired in point 8).This overview captures the financial transactions and obligations of the Watson Foundation for the current year. **Statement of Financial Position for Educational Purposes**The image outlined the preparation of a statement of financial position for the Watson Foundation as of December 31, 2020. Below is a detailed transcription and explanation of its components:---**WATSON FOUNDATION** **STATEMENT OF FINANCIAL POSITION** **December 31, 2020** **Assets:**- **Cash**- **Contributions receivable (net)**- **Investments**- **Investments—internally restricted**- **Land, buildings, and equipment (net)**- **Total assets****Liabilities:**- **Deferred revenues**- **Notes payable**- **Total liabilities****Net Assets:***Without donor restrictions:*- **Unrestricted**- **Board-designated for emergency purposes***With donor restrictions*- **Total net assets**- **Total liabilities and net assets**---### Explanation:- **Assets**: This section lists all resources owned by the foundation, including cash, contributions receivable, investments (both general and internally restricted), and physical assets like land and equipment.- **Liabilities**: This outlines the foundation's obligations, such as deferred revenues and notes payable. Total liabilities sum up these obligations.- **Net Assets**: Divided into unrestricted (including board-designated) and restricted by donors. This section indicates the net economic position of the foundation after liabilities are subtracted from assets.---The statement provides a snapshot of the financial health of the Watson Foundation, showing what is owned, owed, and the net worth at the end of the fiscal year.

The balance sheet is also known as the statement of financial situation. The statement shows…

Answered: t assets with donor restrictio hereas…

t assets with donor restrictio hereas the other $100,000 ome is without restriction. Fif help pay for a new building. made no stipulations about cquired. Watson has one pro

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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2nd and 3rd options are wrong
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