The Atkins Museum recently hired a new controller. His experience with managerial accounting and strong communication skills were extremely attractive. The new controller sent each member of the Board of Trustees€™ Finance Committee a set of the financial statements one week before the monthly meeting for their review. The set included the following statement of activities.

Other information: The management and general expenses are first allocated to the programs to which they directly relate; for example, the executive director€™s salary is allocated to the Public Exhibit Program according to the percentage of time spent working on the program. Remaining unallocated management and general expenses are allocated to the programs as indirect costs based on the relative amount of salaries and wages to total salaries and wages for the programs.

Required
As a member of The Atkins Museum€™s Board of Directors Finance Committee, review this statement and answer the following questions:
a. Is the statement in proper form according to FASB standards?
b. What questions do you have for the controller?
c. The Atkins Museum would like to open an Impressionists exhibit. If its operating expenses are expected to be similar to those of the Abstract Exhibit, how much should the organization solicit in contributions or grants to cover the full cost of the program?
d. If you were a potential contributor to the Atkins Museum, do you think you have enough information from this statement on which to base your decision to donate?

Transcribed Image Text:

THE ATKINS MUSEUM Statement of Activities For the Year Ended June 30, 2020 (in hundreds of dollars) Mgt. & General Public Abstract Exhibits Exhibit Total Revenues: $ 61,400 O $111,400 $50,000 Contributions Charges for services 478,800 478,800 Interest income 2,500 2,500 540,200 Total revenues 50,000 2,500 592,700 Expenses: 381,900 Salaries and wages 24,700 44,200 450,800 14,900 65,000 Occupancy costs 38,100 12,000 8,300 Supplies 7,100 2,300 17,700 5,000 Equipment 6,500 11,500 Travel and development 2,800 6,900 9,700 Depreciation 12,000 1,500 6,300 19,800 Interest 3,700 3,700 Total variable expenses 446,900 40,500 90,800 578,200 Allocated management and general expenses 5,500 85,300 532,200 $ 8,000 (90,800) Total costs 46,000 $ 4,000 578,200 $ 14,500 $ 2,500 Excess of revenues over expenses