Hope received $32,000 in cash from pledges made in the previous year that were u

Question

Hope received $32,000 in cash from pledges made in the previous year that were unrestricted as to purpose but intended to be expended in 2017.

Hope received $91,000 in pledges that indicated the money would be received in 2018. The donors imposed no restrictions other than the money could be used for any purpose desired by the board.

Hope expended $40,000 for nursing training, using $35,000 of temporarily restricted resources that had been given in 2016 for that purpose.

Hope received $50,000, restricted by the donor for cancer research. The funds were not expended in 2017. This is a fixed dollar, not cost reimbursement, grant.

Hope received $270,000 in cash. The board decided to invest the funds for future plant expansion.

Required:
Record the above transactions on the books of Hope Hospital, which follows FASB (not-for-profit) and AICPA standards. The year is 2017.

Explanation / Answer

Journal Entries :-

S. No. Particulars Debit ($) Credit ($) 1 Cash A/c Dr. 32000 To Pledges Receivable 32000 Reclassification from Temporarilt Restricted Net Assets A/c Dr. 32000 To Reclassification to Unrestricted Net Assets 32000 2 Contributions Receivable A/c Dr. 91000 To Revenues 91000 3 Operating Expense A/c Dr. 40000 To Cash 40000 Reclassification from Temporarilt Restricted Net Assets A/c Dr. 35000 To Reclassification to Unrestricted Net Assets 35000 4 Cash A/c Dr. 50000 To Revenues 50000 5 Cash A/c Dr. 270000 To Non-Operating Revenues 270000 Investment A/c Dr. 270000 To Cash 270000 Net Assets-Unrestricted-Undesignated A/c Dr. 270000 To Net Assets-unrestricted-Designated by Board for Future Plant Expansion 270000

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