Quiz 8 Accounting for governmental and nonprofit organizations The Jefferson Mus

ID: 2470966 • Letter: Q

Question

Quiz 8

Accounting for governmental and nonprofit organizations

The Jefferson Museum of Fine Arts is nonprofit organization that does not use separate funds to account for its operations. However, the accounting system does label its accounts to indicate into which net asset classification a particular transaction should be made. The attached transactions occurred during fiscal year 20X4.

Required: Using the attached forms, prepare all general journal entries required, In proper form, to record the above transactions. Be sure t label the accounts to indicate the proper net asset classification. Omit explanations. Use the number of the entry as the date.

(1) Cash of $40,000 was received from donors, who indicated that it may be used fr any purpose desired by the museum.

(2) A donor gave the museum $15,000, indicating that the money may be used only to acquire ancient Chinese pottery.

(3) A donor sent the museum a letter stating that he would donate$20,000 to the museum to purchase examples of American quilt work, provided that the museum launch a campaign to raise a matching amount to also buy additional examples.

(4) The museum spent $6,000 to acquire a fine example of Qing dynasty pottery. The museum capitalizes its art collections.

(5) The museum contacted some of its wealthy patrons to raise funds to buy quilt work to match the amount promised by the donor. It obtained $30,000 in pledges, with 95% expected to come up with the matching funds required for his contribution.

(6) An attorney donated his services to the museum. He spent four hours on museum legal matters and three hours as a salesperson in the museum store. The attorney bills his time at $200 per hour for legal work.

(7) A wealthy patron donated a painting with a fair market value of $7,500 to the museum. The museum accepted the gift with the understanding that it would be sold at auction and the proceeds from the sale could be used any purpose desired by the museum.

Explanation / Answer

Cash

To Contibution - unrestricted

40,000

Contribution receivable

To contribution - temporarily restricted

15,000

Investment

To Cash

6,000

Pledges received

To permanantly restricted contribution

28,500

Expenses - administration

To unrestricted support - donated service

800

Donated item - inventory

To contribution

(Auction proceeds entry will be passed when it wil be actually sold)

7,500

S.No Journal Entry Debit Credit 1