Use the information below to answer questions 18-20. A nonprofit entity had the

Question

Use the information below to answer questions 18-20.

A nonprofit entity had the following selected transactions during the year ended December 31, 2017:

A donor contributed investments valued at $1,000,000 in February. The donor stipulated that the investments be placed into an endowment and that earnings be used to pay for travel expenses. The investments earned $60,000 in 2017, and the fair value of the investments at December 31, 2017 was $985,000. All but $10,000 of the earnings were spent in 2017.

As a result of a telethon, pledges were received totaling $500,000. The fair value of various assets sent to donors in appreciation of their contributions amounted to $40,000. There were no time or purpose restrictions placed on the pledges by the donors.

18. For the year ended December 31, 2017, permanently restricted net assets increased

A.$1,010,000.

B.$ 985,000.

C.$ 995,000.

D.$1,000,000.

19. For the year ended December 31, 2017, temporarily restricted net assets

A.increased $10,000.

B.decreased $50,000.

C.increased $60,000.

D.Increased $50,000.

20. For the year ended December 31, 2017, unrestricted net assets increased

A.$550,000.

B.$510,000.

C.$500,000.

D.$460,000.

21. Which of the following disclosures reported under unrestricted net assets is correct for donations made last year that could not be spent until this year?

A. Reclassification from temporarily restricted net assets—expiration of time restrictions.

B. Reclassification to temporarily restricted net assets—establishment of time restrictions.

C. A and B.

D. Neither A nor B.

22. Which of the following statements is correct?

A. On the Statement of Changes in Unrestricted Net Assets for a nonprofit, private university, all expenses are reported as decreases in unrestricted net assets.

B. The cash received from a donor to establish an endowments is

reported on the statement of financial position as a current asset.

       C. A and B.

D. Neither A nor B.

Explanation / Answer

18 Answer :- C. $ 995,000

19 Answer :- D. Increased $50000

20 Answer :- $550,000

21 Answer :- C. A&B

22 Answer :- B. The cash received from a donor to establish an endowments is reported on the statement of financial position as a current asset

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