All facts about this NFPO are identical to those described in Problem 10, except that the deferral method of recording contributions is used for accounting and for external financial reporting. Fund accounting is not used. The Year 6 transactions are also identical to those described in Problem 10.
The organization's statement of financial position on January 1, Year 6, is shown below.
FAR NORTH CENTRE
STATEMENT OF FINANCIAL POSITION
January 1, Year 6
Current Assets
Cash ..................... $ 895,500
Pledges receivable ............... 705,000
Allowance for uncollectible pledges ........ (30,000)
Grants receivable .............. 330,000
1,900,500
Investments ................. 375,000
Capital assets:
Land and buildings ................ 810,250
Furniture and equipment ........... 491,000
Accumulated depreciation ........... (648,200)
653,050
$2,928,550
Current Liabilities
Accounts payable ................ $ 436,500
Wages payable ................ 137,250
Accrued liabilities ................ 9,750
583,500
Deferred Revenue
Deferred contributions ............. 800,000
Deferred building campaign contributions ..... 391,000
Deferred contributions related to capital assets ..... 240,500
1,431,500
Net Assets
Net assets invested in capital assets ........ 412,550
Net assets restricted for endowment purposes ...... 412,500
Unrestricted net assets .............. 88,500
913,550
$2,928,550
Required:
(a) Prepare the journal entries necessary to reflect the Year 6 events.
(b) Prepare a Year 6 statement of financial position, a statement of revenues and expenses, and a statement of changes in net assets for the year.
(c) Prepare a cash flow statement for the year.
(d) Prepare closing entries.
(e) What are fundraising costs as a percent of total revenues for Year 6? What do you think donors to the Centre will think of this percentage?