Alpha Hospital, a large not-for-profit organization, has adopted an accounting policy that does not imply a time
Question:
Alpha Hospital, a large not-for-profit organization, has adopted an accounting policy that does not imply a time restriction on gifts of long-lived assets.
\section*{Required}
For items 1 through 6 , indicate the manner in which the transaction affects Alpha's financial statements by selecting the appropriate letter.
\section*{Effect}
A Increase in unrestricted revenues, gains, and other support.
B Decrease in expense.
C Increase in temporarily restricted net assets.
D Increase in permanently restricted net assets.
E No required reportable event.
1. Alpha's board designates \(\$ 1,000,000\) to purchase investments whose income will be used for capital improvements.
2. Income from investments in item 1 above, which was not previously accrued, is received.
3. A benefactor provided funds for building expansion.
4. The funds in item 3 above are used to purchase a building in the fiscal period following the period the funds were received.
5. An accounting firm prepared Alpha's annual financial statements without charge to Alpha.
6. Alpha received investments subject to the donor's requirement that investment income be used to pay for outpatient services.
Step by Step Answer:
Advanced Financial Accounting
ISBN: 9780072444124
5th Edition
Authors: Richard E. Baker, Valdean C. Lembke, Thomas E. King