1. Which of the following are required basic statements of a proprietary fund?

a. Balance sheet and income statement.

b. Balance sheet; statement of revenues, expenses, and changes in retained earnings; and statement of cash flows.

c. Statement of net assets and statement of revenues, expenses, and changes in fund net assets.

d. Statement of net position; statement of revenues, expenses, and changes in net position; and statement of cash flows.

2.

The LRF Healthcare Foundation donated 1,800,000 as a permanent endowment to a senior citizen health and welfare organization during the year. The foundation stipulated that the income and investment appreciation be used to maintain its preventive care center for the elderly. The endowment principal had an investment appreciation of $120,000 and investment income of $160,000. The organization spent $140,000 to maintain its preventive care center during the year. What is the amount of change in nonrestricted net assets that the organization should report?

a. 140,000

b. 160,000

c. 280,000

d. 1,940,000