52 The Far North Centre (the Centre) is an anti-poverty organization funded by contributions from governments and the general public. For a number of years. It has been run by a small group of permanent employees with the help of part-timers and dedicated volunteers. It owns its premises, which are in the process of being renovated. The funds for this were obtained through a special capital fund campaign carried out last year. Its main program is the daily provision of meals to the needy. It also distributes clothing. most of which is donated. Operating funds come from government grants, interest earned from endowment investments, and a public campaign held in the latter part of each year to raise funds for the needs of the next fiscal year. The Centre maintains its records in accordance with the deferral method of accounting for contributions. Fund accounting is not used. 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 ), see Pledges receivable 816, eee Allowance for uncollectible pledges (36,000) Grants receivable 436,089 2,114,500 435.000 Investments Capital assets Land and buildings Furniture and equipment Accumulated depreciation 814,000 559,000 (666,500) 706,500 $3,256,000 Current Liabilities Accounts payable Wages payable Accrued alities $ 480,200 169,500 13,100 662,880 Deferred Revenue Deferred contribution revenue aferrerent that is for antal met 858,000 ARGA FAR NORTH CENTRE STATEMENT OF FINANCIAL POSITION January 1, Year 6 Current Assets Cash Pledges receivable Allowance for uncollectible pledges Grants receivable 898,500 816,000 (36,000) 436,000 2,114,500 435,000 :20 Investments Capital assets Land and buildings Furniture and equipment Accumulated depreciation 814,000 559 , . (666,500) 706,500 $3,256,000 Current Liabilities Accounts payable Wages payable Accrued liabilities $ 480,200 169,500 13,100 662,800 Deferred Revenue Deferred contribution revenue Deferred unspent contributions for capital assets Deferred contributions related to capital assets 858,000 489,400 282,500 1,629,900 Net Assets Net assets restricted for endowment purposes Unrestricted net assets 478,500 484,800 963,300 $3,256,800 The following transactions took place in Year 6: 1. $60,900 from endowment fund cash was invested in marketable securities 2. Office equipment costing $5,300 was purchased with operating fund cash 3. Invoices totalling $1605,000 were received for goods and services. These invoices were recorded as accounts payable and were allocated 55% to food program, 20% to clothing program, and 25% to administration 4. The capital fund grants receivable of $168,500 were collected in full, and the $18,200 in accounts payable was paid. During Year 6. building renovations costing $378,000 and equipment purchases of $105,000 were made. Of this cost, 90% was paid, with the balance held back and still owing at year-end. 5. Operating fund accounts payable amounting to $1.645,000 and the wages payable and accrued Habilities at the beginning of the year were all paid 6. All of the operating fund pledges receivable and grants receivable of $267.500 7. The deferred revenue from the Year 5 fundraising campaign was made up of the following: Contributions for your activities Less: Campulun expense $1,406,600 $45,000 $858,000 The Centre runs the campaign with its own people and is fully responsible for all decisions made during the campaign 8. Government grants for operating purposes totalled $881,500, of which $790.000 was received during the year with the balance expected early in Year 7 9. The total wage costs for the year amounted to $222,500, of which $129,000 was paid and $93,500 is payable at year-end. These costs are to be allocated 40% each to the food and clothing programs, with the balance to administration 10. The campaign to raise funds for next year's operations was held in December. Cash of $576,000 was collected and pledges of $748.000 were received. It is expected that 5% of these pledges will be uncollectible. Total fundraising costs were $536,000, of which $104,500 is still owed to suppliers 11. An endowment contribution of 59100 cash was received, In addition, the investments in the endowment fund earned $33,500 in Interest. 12. The annual depreciation on the buildings and equipment amounted to $100,000 Help Other Information: 13. Seventy percent of the depreciable capital assets at the end of the year were purchased with restricted contributions. Required: (a) Prepare the journal entries necessary to reflect the Year 6 events. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction ist view journal entry worksheet Debit Credit Record investment in marketable securities. B Record purchase of equipment Record invoices received and allocated to food and clothing program and to administration, D Becord grants received and receivable. E Record purchase of buildings and equipment, F Record the transfer of campaign contributions equal to costs of renovations and new equipment. DIS Record settlement of accounts payable, wages payable Internal entry has han antara Not Prow SH Nevt . ... X BE L. H Record cash received on operating pledges and grants receivable from the beginning of the year. I Record contributions received for the year. Record government grants received for current year and receivable for next year. K Record wage cost incurred and allocated to food and clothing program and to administration. L Record entry for pledges received and cash collected on pledges and uncollectible pledges. Note = journal entry has been entered *** L Record entry for pledges received and cash collected on pledges and uncollectible pledges. M Record fundraising expenses. N Record deferred contributions entry. o Record receipt of endowment fund P Record interest revenue. Q Record depreciation expense. R Record amortization of deferred contributions related to capital assets. Note = iournal entry has been entered (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. (Input all amounts as positive values. Omit $ sign in your response.) Far North Centre Statement of Financial position December 31 Year 6 Current Assets Cash Pledges receivable (net of uncollectible allowance) Grants receivable Investments Capital ossets Land and buildings Furniture and equipment Accumulated depreciation Current Liabilities Accounts payable Wages payable Deferred Revenue Deferred contributions Deferred unspent contributions for capital assets Deferred contributions related to capital assets Net Assets Restricted for endowment Unrestricted Far North Centre Statement of Revenues and Expenses for the Year Ended December 31, Year 6 Revenues Contributions Government grants Interest earned Amortization of deferred contributions Expenses Food program Clothing program Administration Fundraising Depreciation Excess of expenses over revenue Far North Centre Statenent of Changes in Net Assets for the Year Ended December 31, Year 6 Restricted for endowment Unrestricted 5 Total $ Balance January 1 Excess of expenses over revenues Endowment contributions Balance December 31 $ $