Chapter 1, Problem 2E

(Expenditures vs. Expenses) Family Services, a small social service nonprofit agency, began operations on January 1, 20X1, with $40,000 cash and $150,000 worth of equipment, on which $60,000 was owed on a note to City Bank. The equipment was expected to have a remaining useful life of 15 years with no salvage value. During its first year of operations, ending December 31, 20X1, Family Services paid or accrued the following:

1. 1. Salaries and other personnel costs, $100,000.
2. 2. Rent and utilities, $24,000.
3. 3. Debt service: interest, $5,500, and payment on long-term note principal, $10,000.
4. 4. Capital outlay: additional equipment purchased January 3, $30,000, expected to last 6 years and have a $6,000 salvage value.
5. 5. Other current operating items paid with cash, $4,500.

There were no prepayals or unrecorded accruals at December 31, 20X1, and no additional debt was incurred during the year.

Compute for the Family Services agency, for the year ended December 31, 20X1, its total (a) Required expenses and (b) expenditures.