ADVANCED ACCOUNTING
4th Edition
ISBN: 9781618533678
Author: HOPKINS
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Question
Chapter 11, Problem 30P
a.
To determine
Prepare the required
Y C during the year.
a.
Expert Solution
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Explanation of Solution
The required journal entries are as follows:
Date | Account title and Explanation | Post Ref | Debit ($) | Credit ($) |
i. | Contributions receivable | |||
Cash | ||||
Support—contributions (without donor restrictions) | ||||
Support—contributions (with donor restrictions) | ||||
Revenues—investment (without donor restrictions) | ||||
Revenues—investment (with donor restrictions) | ||||
(To recognize support and revenues) | ||||
ii. | Net assets released from restrictions - with donor restrictions | |||
Net assets released from restrictions - without donor restrictions | ||||
iii. | Expenses—program | |||
Expenses—support | ||||
Payables | ||||
(To record expenses) | ||||
iv. | Property, plant and equipment, net | |||
Program expense | ||||
Support expense | ||||
Cash | ||||
(To record the net increase in long-term assets and depreciation expense) | ||||
v. | Cash | |||
Payables | ||||
Contributions receivable | ||||
(Paid for accounts payables and record contributions received) |
b.
To determine
Prepare the statement of activities and the
b.
Expert Solution
![Check Mark](/static/check-mark.png)
Explanation of Solution
A non-profit organization issues a slightly different set of financial statements than those issued by a profit entity. The financial statements published by the non-profit organization are as follows:
- Statement of financial position: This is similar to the balance sheet of a for-profit entity, except that the net assets segment assumes the place of the equity portion used by a for profit entity. The net assets segment breaks down into unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.
- Statement of activities: The statement measures non-profit income and expenditures for the reporting period. Both sales and expenditures are broken down into the unrestricted temporary and permanently restricted classifications related to above for the statement of financial position.
- Statement of
cash flows: This statement comprises information about cash flows into and out of a non-profit organization; in fact, it displays the degree of those non-profit operations that produce and use funds. - Statement of functional expenses: The statement shows how the expenses are accumulated for each functional area of the company. Functional areas usually involve procurement and accounting, raising funds and services.
The statement of activities of the organization Y C is as follows:
Statement of Activities | Without DonorRestrictions | With DonorRestrictions | Total | |||
Support—contributions | $10,360,000 | $1,036,000 | $11,396,000 | |||
Revenues—investment | 111,888 | 154,512 | 266,400 | |||
Net assets released from restrictions | 740,000 | (740,000) | 0 | |||
Total revenue and gains | 11,211,888 | 450,512 | 11,662,400 | |||
Expenses program | 9,913,040 | 9,913,040 | ||||
Expenses support | 1,408,960 | 1,408,960 | ||||
Total operating expenses | 11,332,000 | 11,322,000 | ||||
Change in net assets | (110,112) | 450,512 | 340,400 | |||
Net assets, beginning of year | 5,920,000 | 5,550,000 | 11,470,000 | |||
Net assets, end of year | $5,809,888 | $6,000,512 | $11,810,400 | |||
The statement of financial position of the organization Y C is as follows:
Statement of Financial Position | Amount ($) | |
Cash | $821,400 | |
Investments | 8,880,000 | |
Contributions receivable | 2,220,000 | |
Total current assets | 11,921,000 | |
Property, plant and equipment, net | 4,588,000 | |
Total assets | $16,509,400 | |
Payables | $1,739,000 | |
Total current liabilities | 1,739,000 | |
Long term liabilities | 2,960,000 | |
Total liabilities | 4,699,000 | |
Net assets-without donor restrictions | 5,809,888 | |
Net assets-with donor restrictions | 6,000,512 | |
Total net assets | $11,810,400 | |
Total liabilities and net assets | $16,509,400 | |
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For each of the transactions above, indicate the amount of the adjusting entry on the elements of the balance sheet and income statement.Note: Enter negative amounts with a minus sign.
Chapter 11 Solutions
ADVANCED ACCOUNTING
Ch. 11 - Prob. 1QCh. 11 - Prob. 2QCh. 11 - Prob. 3QCh. 11 - Prob. 4QCh. 11 - Prob. 5QCh. 11 - Prob. 6QCh. 11 - Prob. 7QCh. 11 - Prob. 8QCh. 11 - Prob. 9QCh. 11 - Prob. 10Q
Ch. 11 - Prob. 11MCCh. 11 - Prob. 12MCCh. 11 - Prob. 13MCCh. 11 - Prob. 14MCCh. 11 - Prob. 15MCCh. 11 - Prob. 16MCCh. 11 - Prob. 17MCCh. 11 - Prob. 18MCCh. 11 - Prob. 19MCCh. 11 - Prob. 20MCCh. 11 - Prob. 21MCCh. 11 - Prob. 22MCCh. 11 - Prob. 23MCCh. 11 - Prob. 24MCCh. 11 - Prob. 25ECh. 11 - Prob. 26ECh. 11 - Prob. 27ECh. 11 - Prob. 28ECh. 11 - Prob. 29PCh. 11 - Prob. 30PCh. 11 - Prob. 31P
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