An international children\'s charity collects donations, which are used to buy c

Question

An international children's charity collects donations, which are used to buy clothing and toys for children in need. The charity records donations of cash and other items as Donations Revenue when received. a. Received $4,750 in cash and checks from a door-to-door campaign b. Incurred and paid $1,500 cash for employee wages this month c. Paid $1,050 cash on a short-term loan from the bank (ignore interest). d. Bought $5,200 worth of new toy supplies from a large toy manufacturer, paying $2,200 cash and signing a short-term note for $3,000 e. The manufacturer generously donated an additional $3,800 of toy supplies. Required 1. Prepare journal entries for the above transactions, which occurred during a recent month. 2. Determine the charity's preliminary net income. Complete this question by entering your answers in the tabs below. Required 1 Required 2

Explanation / Answer

a Cash 4750       Donations revenue 4750 b Wages expense 1500       Cash 1500 c Bank loan payable 1050       Cash 1050 d Supplies 5200       Cash 2200       Note payable 3000 e Supplies 3800       Donations revenue 3800 2 Preliminary net income = 4750+3800-1500= $7050

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