[The following information applies to the questions displayed below.] INVOLVE wa

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[The following information applies to the questions displayed below.] 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 $36,300 a 2. A fund drive raised $191,500 in cash and $113,000 in pledges that will be paid within one year. A state year government grant of $163,000 was received for program operating cost related to public health education Salaries and fringe benefits paid during the year amounted to $209,860. At year-end, an additional $17,300 of salaries and fringe benefits were accrued A donor pledged $113,000 for construction of a new building, payable over five fiscal years, commencing in 2019. The discounted value of the pledge is expected to be $95,560 Office equipment was purchased for $13,300. The useful life of the equipment is estimated to be 4 years Office furniture with a fair value of $10,900 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. Telephone expense for the year was $6,500, printing and postage expense was $13,300 for the year, utilities for the year were $9,600 and supplies expense was $5,600 for the year. At year-end, an immaterial amount of supplies remained on hand and the balance in accounts payable was $4,900 3. 4. 5. 6. 7. Volunteers contributed $16,300 of time to help with answering the phones, mailing materials, and 8· It is estimated that 80 percent of the pledges made for the 2018 year will be collected. Depreciation 9. Salaries and wages, and other expenses (except for the provision for uncollectible accounts which is various other clerical activities expense is recorded for the full year on the assets recorded in item 5 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 All nominal accounts were closed to the appropriate net asset accounts 11.

Explanation / Answer

Answer

a

No Transaction Particular Debit Credit 1 1 Rent Expense $36,300         To Contribution - Unrestricted $36,300 2 2 Cash $354,500 Contributions Receivable $113,000         To Contribution - Unrestricted $191,500         To Contribution - Temporarily Restricted $276,000 3 3 Salaries & Benefits Expenses $227,160         To Cash $209,860         To Salaries & Benefits Payable $17,300 4 4 Contributions Receivable $113,000         To Contribution - Temporarily Restricted $95,560         To Discount on Contributions Receivable $17,440 5 5 Equipment & Furniture $24,200         To Cash $13,300         To Contribution - Unrestricted $10,900 6 6 Telephone Expense $6,500 Postage Expense $13,300 Utilities Expense $9,600 Supplies Expense $5,600         To Cash $30,100         To Accounts Payable $4,900 7 7 No Entry Recorded 8 8(a) Provision for Uncollectible Pledges $22,600         To Allowance for Uncollectible Pledges - Unrestricted $22,600 9 8(b) Depreciation Expense $4,415         To Allowance for Depreciation - Equipment & Furniture $4,415 10 9 Public Health Education Program $121,150 Community Service Program $60,575 Management General $60,575 Fund Raising $60,575         To Salaries & Benefits Expense $227,160         To Rent Expense $36,300         To Telephone Expense $6,500         To Printing & Postage Expense $13,300         To Utilities Expense $9,600         To Supplies Expense $5,600         To Depreciation Expense $4,415 $302,875 $302,875 11 10 Net Assets Released - Satisfaction of Purpose Restriction - Temporarily Restricted $163,000         To Net Assets Released - Satisfaction of Purpose Restriction - Unrestricted $163,000 12 11(a) Contributions - Unrestricted $238,700 Unrestricted Net Asstes $86,775         To Public Health Education Program $121,150         To Community Service Program $60,575         To Management General $60,575         To Fund Raising $83,175 13 11(b) Contributions - Temporarily Restricted $371,560         To Temporarily Restricted Net Assets $371,560 14 11(c) Temporarily Restricted Net Assets $371,560         To Net Assets Released - Satisfaction of Purpose Restriction - Temporarily Restricted $371,560 15 11(d) Net Assets Released - Satisfaction of Purpose Restriction - Unrestricted $163,000         To Unrestricted Net Assets $163,000

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