None The Lake Coast bank is holding a $750,000 donation in an independent permanent trustwith the investment income dedicated for use by Lake Hospital for operating purposes.The $750,000 principal should be:Reported as an asset limited as to use by the hospital.Reported as non-operating revenue of the hospital.Reported as a donor restricted net asset of the hospital.Disclosed in notes to the financial statements of the hospital.

Disclosed in notes to the financial statements of the hospital:Explanation: This option suggests…

Answered: The Lake Coast bank is holding a…

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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Which one of the following is a correct statement about the nontax characteristics of a pooled income fund? A)It must pay a fixed dollar amount to the charitable beneficiary annually. B)The principal is distributed to the charitable beneficiary at the end of the noncharitable beneficiary's (or beneficiaries') life (or lives). C)Only the grantor and the charity can be beneficiaries. D)The income beneficiary cannot receive more than 10% of the original principal value per year.
A local private not-for-profit health care entity incurred the following transactions during the current year. Record each of these transactions in appropriate journal entry form. Prepare a schedule calculating the change in unrestricted, permanently restricted, and temporarily restricted net assets. The entity’s governing board announced that $160,000 in previously unrestricted cash will be used in the future to acquire equipment. The funds are invested until the purchase eventually occurs. Received a donation of $80,000 with the stipulation that all income derived from this money be used to supplement nursing salaries. Expended $25,000 for medicines. The entity received the money the previous year as a restricted gift for this purpose. Charged patients $600,000, 80 percent of which is expected to be covered by third-party payors. Calculated depreciation expense of $38,000. Received interest income of $15,000 on the investments the board acquired in transaction (a) Estimated that…
A citizen group raised funds to establish an endowment for the Eastville City Library. Under the terms of the trust agreement, the principal must be maintained, but the earnings of the fund are to be used to purchase database and periodical subscriptions for the library. A preclosing trial balance of the library permanent fund follows: Trial Balance-December 31, 2020 Cash Investments Additions to permanent endowments Investment income Expenditures-subscriptions Net increase in fair value of investments Accrued interest receivable Accounts payable Required: a. Prepare any closing entries necessary at year-end. $ Debits 12,000 532,000 46,500 3,750 $ 594,250 Credits $ 520,500 58,500 11,500 3,750 $ 594,250
A citizen group raised funds to established an endowment for the Eastville City Liabrary. Under the terms of the trust agreement, the principal must be maintained, but the earnings of the fund are to be used to purchase database and periodical subscriptions for the library. A preclosing trial balance of the library permanant fund follows: Debits: Cash $7,500; Investments $630,000; Expenditures - subscriptions $39,500 Accrued interest receivable $2,000 Credits: Additions to permanant endowments $625,000; Investment Income $48,000; Net increase in fair value of investments $5,000; Accounts Payable Required: A. Prepare any closing entries necessary at year-end b. prepare a Statement of Revenuess, Expenditures, and Changes in Fund Balance for the library Permanant fund. c. Prepare a balance sheet for the library permamant fund (use restricteed to Library for any spendable fund balance)
A local private not-for-profit health care entity incurred the following transactions during the current year. Record each of these transactions in appropriate journal entry form. Prepare a schedule calculating the change in unrestricted, permanently restricted, and temporarily restricted net assets.a. The entity’s governing board announced that $160,000 in previously unrestricted cash will be used in the future to acquire equipment. The funds are invested until the purchase eventually occurs.b. Received a donation of $80,000 with the stipulation that all income derived from this money be used to supplement nursing salaries. c. Expended $25,000 for medicines. The entity received the money the previous year as a restricted gift for this purpose.d. Charged patients $600,000, 80 percent of which is expected to be covered by third-party payors.e. Calculated depreciation expense of $38,000.f. Received interest income of $15,000 on the investments the board acquired in…
A citizen group raised funds to establish an endowment for the Eastville City Library. Under the terms of the trust agreement, the principal must be maintained, but the earnings of the fund are to be used to purchase database and periodical subscriptions for the library. A preclosing trial balance of the library permanent fund follows: Trial Balance December 31, 2020 Cash Investments Additions to permanent endowments Investment income Expenditures-subscriptions Net increase in fair value of investments Accrued interest receivable Accounts payable Required A Debits Required B 7,500 630,000 Required C 39,500 2,000 Credits $ 625,000 48,000 Required: a. Prepare any closing entries necessary at year-end. b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the library permanent fund. c. Prepare a balance sheet for the Library Permanent Fund (Use Restricted to Subscriptions for any spendable fund balance). Complete this question by entering your answers in the…
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The General Fund of the Town of Mashpee transfers $115,000 to the debt service fund for a $100,000 principal and $15,000 interest payment. The recording of this transaction would include: a. A debit to Interest Expenditures in the General Fund. b. A debit to Interest Expenditures in the governmental activities accounts. c. A credit to Other Financing Sources - Interfund Transfers In in the debt service fund only. d. A credit to Other Financing Sources - Interfund Transfers In in both the debt service fund and governmental activities accounts.
! 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…
Record the following events that affect (1) Public University and (2) Private University: a. A private grant of $200,000 was received to be used exclusively for defraying costs of holding conferences on the topic of genes. b. By year-end, $110,000 of the grant mentioned in item (a) had been applied to the purpose stipulated. c. The grant provided that amounts not awarded by year-end are to be transferred to the endowment fund. The liability to that fund is recorded. d. An alumnus, who was a former athlete, contributed $15,000 to assist in the search for a basketball coach.
Urban Hospice (UH) is a not-for-profit organization. It receives some funding from the government, but most of its funding comes from donations and bequests. It uses the deferral method to account for contributions and an encumbrance system to control expenditures. For simplicity, UH accounts for all of its activities through an operations fund. UH has provided the following selected transactions for the current year: a. At the beginning of the year, UH unexpectedly received $1,000,000 from the government to purchase three monitoring machines. UH immediately purchased the machines. Since UH purchased the machines as soon as the funds were received, it did not prepare a purchase order for them. At the end of the year, UH took depreciation of $200,000 on the machines. b. UH's annual Christmas fundraising gala generated $3,011,000 in cash and $820,000 in pledges. Based on previous years' experiences, UH estimates that 85 percent of the pledges will be collected in the first three months…
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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