INVOLVE was incorporated as a not-for-profit voluntary health and welfare organi
ID: 2551622 • Letter: I
Question
INVOLVE was incorporated as a not-for-profit voluntary health and welfare organization on January 1, 2017. During the fiscal year ended December 31, 2017, the following transactions occurred.
1.
A business donated rent-free office space to the organization that would normally rent for $35,700 a year.
2.
A fund drive raised $188,500 in cash and $107,000 in pledges that will be paid within one year. A state government grant of $157,000 was received for program operating cost related to public health education.
3.
Salaries and fringe benefits paid during the year amounted to $209,260. At year-end, an additional $16,700 of salaries and fringe benefits were accrued.
4.
A donor pledged $107,000 for construction of a new building, payable over five fiscal years, commencing in 2019. The discounted value of the pledge is expected to be $94,960.
5.
Office equipment was purchased for $12,700. The useful life of the equipment is estimated to be 4 years. Office furniture with a fair value of $10,300 was donated by a local office supply company. The furniture has an estimated useful life of 10 years. Furniture and equipment are considered unrestricted net assets by INVOLVE.
6.
Telephone expense for the year was $5,900, printing and postage expense was $12,700 for the year, utilities for the year were $9,000 and supplies expense was $5,000 for the year. At year-end, an immaterial amount of supplies remained on hand and the balance in accounts payable was $4,300.
7.
Volunteers contributed $15,700 of time to help with answering the phones, mailing materials, and various other clerical activities.
8.
It is estimated that 80 percent of the pledges made for the 2018 year will be collected. Depreciation expense is recorded for the full year on the assets recorded in item 5.
9.
Salaries and wages, and other expenses (except for the provision for uncollectible accounts which is allocated 100 percent to fund-raising) were allocated to program services and support services in the following percentages: public health education, 40 percent; community service, 20 percent; management and general, 20 percent; and fund-raising, 20 percent.
10.
Net assets were released to reflect satisfaction of state grant requirements that the grant resources be used for public health education program purposes.
11.
All nominal accounts were closed to the appropriate net asset accounts.
Required
a.
Prepare journal entries to record these transactions. Expense transactions should be initially recorded by object classification; in entry 10 expenses will be allocated to functions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Round the intermediate and final answers to the nearest dollar amount.)
b.
Prepare a statement of activities for the year ended December 31, 2017. (Negative amounts should be indicated by a minus sign. Round the intermediate and final answers to the nearest dollar amount.)
INVOLVE was incorporated as a not-for-profit voluntary health and welfare organization on January 1, 2017. During the fiscal year ended December 31, 2017, the following transactions occurred.
Explanation / Answer
WITH DONOR
RESTRICTION
WITHOUT DONOR
RESTRICTION
DATE TITLES AND TRANSACTIONS DEBIT CREDIT OFFICE SPACE 35700 DONATION RECIEVED 35700 CASH 188500 PLEDGES 107000 FUNDS 295500 TEMPORARILY RESTRICTED NET ASSETS 157000 GOVERMENT GRANT (FOR PUBLIC HEALTH PROG.) OBLIGATION 157000 SALARIES AND FRINGE BENEFITS 225960 CASH 209260 SALARIES AND FRINGE BENEFITS OBLIGATONS 16700 PLEDGE FOR BUIDING 94960 DONATION RECIVABLE 94960 OFFICE EQUIPMENT 12700 OFFICE FURNITURE 10300 CASH 12700 DONATION 10300 DEPRICATION ON OFFICE EQUIPMENT 3175 DEPRICATION ON OFFICE FURNITURE 1030 OFFICE EQUIPMENT 3175 OFFICE FURNITURE 1030 TELEPHONE EXPENSES 5900 PRINT AND POSTAGE EXP. 12700 UTILITIES 9000 SUPPLIES 5000 CASH 28300 ACCOUNTS PAYABLE 4300 CLERICAL ACTIVITES EXPENSES 15700 CONTRIBUTION FROM VOLUNTEERS 15700 REDUCTION IN PLEDGE 21400 PLEDGES 21400 UNRESTRICTED NET ASSETS (OFFICE ASSET+EXP.) 183351 TEMPORARILY RESTRICTED NET ASSETS 109704 OFFICE EQUIPMENT(NET) 9525 OFFICE FURNITURE(NET) 9270 SALARIES AND FRINGE EXP 225960 TELEPHONE EXP 5900 PRINT AND POSTAGE 12700 UTILITIES 9000 SUPPLIES 5000 CLERICAL ACTIVTIES EXPENSES 15700 EXPLANATION: THE OFFICE FUR. &EQUIP ARE UNRESTRICTED ASSETS GIVEN CLEARLY. THE EXPENSES ALLOCATION % ARE GIVEN, BY APPLYING THIS% WE WILL CLASSIFIED EXPENSES IN NET ASSETS. TOTAL EXPENSES ARE 274260 (SALARIES TO CLERICAL EXP.) 40% TO TEMPORARILY RESTRICTED NET ASSETS AS RELATED TO GOVT. GRANT REQUIREMENTS, 60% ARE UNRESTRICTED NET ASSETS USED IN DAILY OPERATIONS. 10 PUBLIC HEALTH EDUCATION PROGRAM EXPENSES 157000 TEMPORARILY RESTRICTED NET ASSETS 157000 PERMANANT RESTRICTED NET ASSETS 405660 OFFICE SPACE 35700 CASH 188500 PLEDGE 86500 PLEDGE FOR BUILDINGS 94960Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.