The Blair Museum Association, a nonprofit organization, had the following transactions for the year ended December 31, 2020.

1. Cash contributions to the Association for the year included (a) unrestricted, $950,000; (b) restricted for traveling displays, $250,000; (c) restricted by the donor for endowment purposes, $1,400,000; and (d) restricted by the donor for museum security equipment, $470,000.

2. Additional unrestricted cash receipts included (a) admission charges, $365,000; (b) interest income, $210,000; and (c) tuition for museum school, $70,000.

3. Donors made pledges in 2020 in a pledge drive specifically for funds to be used in 2021. The amount was $400,000.

4. A multiyear pledge (temporarily restricted) was made at the end of the year by a private foundation. The foundation pledged $50,000 per year for the next five years (at the end of each year). The present value (rounded) of those future payments is $211,000, using a 6 percent discount rate.

5. Expenses associated with the traveling display program amounted to $230,000 and were paid in cash before year-end.

6. The Museum collected pledges receivable from the previous year of $135,000. Although not restricted in purpose, the revenue (last year) had been classified as time restricted because collection was not scheduled until 2020.

7. The Museum purchased security equipment for $475,000 (cash). The Museum Association records all equipment in the unrestricted class of net assets.

8. In addition to the amount expended in transaction 5, expenses (paid in cash) amounted to (a) museum displays, $1,300,000; (b) museum school, $85,000; (c) management and general, $350,000; (d) fund-raising, $250,000; and (e) membership development, $145,000. 

9. Depreciation on museum fixed assets amounted to: (a) $40,000 for museum displays, (b) $7,000 for museum school, (c) $12,000 for management and general, (d) $4,000 for fund-raising, and (e) $4,000 for membership development. 

Required:

a. Prepare journal entries to record these transactions, including closing entries. Prepare a Statement of Activities for the Blair Museum Association for the year ended December 31, 2020. Use the format in the text. The beginning net asset balances were  $412,000 without donor  restrictions, $150,000; with donor-imposed restrictions, $3,500,000 in an endowment created by donors.

b. The Museum School program expenses are substantially larger than its revenues. Do you recommend that the program be discontinued?