Required information[The following information applies to the questions displayed below.]The Kare Counseling Center was incorporated as a not-for-profit organization 10 years ago. Its adjusted trial balance as ofJune 30, 2023, follows.CashPledges Receivable-Without Donor RestrictionsEstimated Uncollectible PledgesInventoryInvestmentsFurniture and EquipmentAccumulated Depreciation-Furniture and EquipmentAccounts PayableNet Assets Without Donor RestrictionsNet Assets With Donor Restrictions-ProgramsNet Assets With Donor Restrictions-Permanent EndowmentContributions-Without Donor RestrictionsContributions-With Donor Restrictions-ProgramsInvestment Income-Without Donor RestrictionsNet Assets Released from Restrictions-With Donor RestrictionsNet Assets Released from Restrictions-Without Donor RestrictionsSalaries and Fringe Benefit ExpenseOccupancy and Utility ExpenseSupplies ExpensePrinting and Publishing ExpenseTelephone and Postage ExpenseUnrealized Gain on InvestmentsDepreciation ExpenseTotalsDebits$ 111,40043,0004,800198,000230,00042,000290,41040,4008,9406,1905,50040,000$1,020,640Credits6,100130,00022,520198,50052,500160,000350,82043,00011, 20042,0004,000$1,020, 6401. Salaries and fringe benefits were allocated to program services and supporting services in the following percentages:counseling services, 40 percent; professional training, 20 percent; community service, 10 percent; management andgeneral, 20 percent; and fund-raising, 10 percent. Occupancy and utility, supplies, printing and publishing, andtelephone and postage expenses were allocated to the programs in the same manner as salaries and fringe benefits.Depreciation expense was divided equally among all five functional expense categories.2. The organization had $175,014 of cash on hand at the beginning of the year. During the year, the center received cashfrom contributors: $303,100 that was unrestricted and $43,000 that was restricted for the purchase of equipment for thecenter. It had $11,200 of income earned and received on long-term investments. The center spent cash of $290,410 onsalaries and fringe benefits, $42,000 on the purchase of equipment for the center, and $88,504 for operatingexpenses. Other pertinent information follows: net pledges receivable increased $4,800, inventory increased $3,200,accounts payable decreased $110,194, and there were no salaries payable at the beginning of the year. Required informationCashPledges ReceivableInventoryInvestmentsFurniture and EquipmentTotal AssetsAccounts PayableTotal LiabilitiesStatement of Financial PositionJune 30, 2023Total Net AssetsTotal Liabilities and Net AssetsAssetsLiabilitiesNet AssetsWithout Donor RestrictionsWith Donor Restrictions-ProgramsWith Donor Restrictions-Permanent Endowment$111,40036,9004,800$198,000100,000451,100$ 22,52022,52084,000x198,500160,000442,500465,020

Balance sheet stands for the statement and information that shows the assets and liabilities of the…

The Kare Counseling Center was incorporated as a not-for-profit organization 10 years ago. Its adjusted trial balance as of June 30, 2023, follows. Cash Pledges Receivable-Without Donor Restrictions Estimated Uncollectible Pledges Inventory Investments Furniture and Equipment Accumulated Depreciation-Furniture and Equipment Accounts Payable Net Assets Without Donor Restrictions Net Assets With Donor Restrictions-Programs Net Assets With Donor Restrictions-Permanent Endowment Contributions-Without Donor Restrictions Contributions-With Donor Restrictions-Programs Investment Income-Without Donor Restrictions Debits $ 111,400 43,000 4,800 198,000 230,000 $ Credits 6,100 130,000 22,520 198,500 52,500 160,000 350,820 43,000 11.200

The Kare Counseling Center was incorporated as a not-for-profit organization 10 years ago. Its adjusted trial balance as of June 30, 2023, follows. Cash Pledges Receivable-Without Donor Restrictions Estimated Uncollectible Pledges Inventory Investments Furniture and Equipment Accumulated Depreciation-Furniture and Equipment Accounts Payable Net Assets Without Donor Restrictions Net Assets With Donor Restrictions-Programs Net Assets With Donor Restrictions-Permanent Endowment Contributions-Without Donor Restrictions Contributions-With Donor Restrictions-Programs Investment Income-Without Donor Restrictions Debits $ 111,400 43,000 4,800 198,000 230,000 $ Credits 6,100 130,000 22,520 198,500 52,500 160,000 350,820 43,000 11.200

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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Snow Inc., a calendar year, accrual basis corporation, wants to make a $20,000 donation to the Wild Bird Sanctuary, a qualified charitable organization, but does not have adequate funds to make the contribution in 2023. On December 28, 2023, Snow's board of directors authorizes a $20,000 contribution to the Wild Bird Sanctuary. The donation is made on April 10, 2024. Based on these facts: a. Snow's 2023 income is reduced by $10,000 and Snow's 2024 income is reduced by $10,000. b. Snow gets no tax benefit in either 2023 or 2024 for the charitable contribution. c. Snow must pay $4,200 in Federal income taxes in 2023. d. Snow must deduct the $20,000 contribution in 2024, the year of the payment. e. Snow defers payment of $4,200 in Federal income taxes in 2023.
10-15. Jefferson Animal Rescue is a private not-for-profit clinic and shelter for abandoned domesticated animals, chiefly dogs and cats. At the end of 2019, the organization had the following account balances: [See attached image] The following took place during 2020: 1. Additional supplies were purchased on account in the amount of $16,050.2. Unconditional (and unrestricted) pledges of support were received totaling $95,000. In light of a declining economy, 4 percent is expected to be uncollectible. The remainder is expected to be collected in the current year.3. Supplies used for animal care amounted to $17,200.4. Payments made on accounts payable amounted to $17,100.5. Cash collected from pledges totaled $90,500.6. Salaries were paid in the amount $47,500. Included in this amount is the accrued wages payable at the end of 2019. (The portion of wages expense attributable to administrative expense is $15,000 and fund-raising expense is $2,000. The remainder is for animal care.)7.…
The following selected transactions occurred for a nongovernmental, not-for-profit organization. 1. Received a contribution of stock to establish an endowment fund. The income from the endowment is unrestricted. The donor had acquired the stock for $23 about 20 years earlier. Its estimated fair value when donated was $250. 2. Pledges receivable at year end were $100, all from pledges received during the year. The pledges are unrestricted and 5% of the pledges are estimated to be uncollectible. The pledges expect to be collected early next year. For questions 3-5, assume that the organization has adopted a policy that restrictions on donations made for capital purposes are met when the capital item is purchased. A cash gift of $200 was received restricted for the purchase of equipment. Equipment of $80 was purchased from the gift restricted for this purpose. Depreciation expense for the year on the equipment purchased is $10. Required: Prepare the journal entries for the above…
Early in 2018, a not-forprofit organization received a $4,000,000 gift from a wealthy benefactor. This benefactor specified that the gift be invested in perpetuity with income restricted to provide speaker fees for a lecture series named for the benefactor. The not-for-profit is permitted to choose suitable investments and is responsible for all other costs associated with initiating and administering this series.Neither the donor’s stipulation nor the law addresses gains and losses on this permanent endowment. In 2018, the investments purchased with the gift earned $100,000 in dividend income. The fair value of the investments increased by $300,000. The not-for-profit’s accounting policy is to record increases in net assets, for which a donor-imposed restriction is met in the same accounting period as gains and investment income are recognized, as increases in unrestricted net assets.Five presentations in the lecture series were held in 2018. The speaker fees for the five…
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2
The governing board of a private not-for-profit entity votes to set $400,000 in cash aside in an investment fund so that this money and future interest will be available in five years, when a new building is scheduled for construction. Which of the following is not true? Multiple Choice The investments are reported on the statement of financial position as net assets without donor restrictions. The acquisition of the investments is not reported on the statement of activities. Board-designated funds will appear in the net asset section of the statement of financial position as net assets with donor restrictions. Income earned by these investments appears on the statement of activities under net assets without donor restrictions.
The Watson Foundation, a private not-for-profit entity, starts 2020 with cash of $100,000, contributions receivable (net) of $200,000, investments of $300,000, and land, buildings, and equipment (net) of $200,000. Net assets without donor restrictions were reported as $400,000, the same figure as the net assets with donor restrictions. Of the restricted net assets, $300,000 was purpose restricted whereas the other $100,000 had to be held permanently, although the subsequently earned income is without restriction. Fifty percent of the purpose restricted net assets had to be used to help pay for a new building. The remainder was restricted to the payment of officer salaries. Donors made no stipulations about the eventual reporting of buildings and other long-lived assets when acquired. Watson has one program service (health care) and two supporting services (fundraising and administrative). During the current year, Watson Foundation has the following transactions. Computed interest of…
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Fruits & Veggies, a nonprofit, conducts two types of programs: education and research. It does not use fund accounting. During the fiscal year, 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 amount pledged. $180,000 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 $171,000 in cash on the amount pledged in the previous transaction. It wrote off the balance as uncollectible.
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