Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A not-for-profit residential assisted-living center engaged in the following transactions during the year. Prepare appropriate journal entries. a) The center billed residents for $4,100,000. Of

A not-for-profit residential assisted-living center engaged in the following transactions during the year. Prepare appropriate journal entries.

a) The center billed residents for $4,100,000. Of this amount it estimates that $2,000,000 will be paid by third-party providers at a rate of only 80 percent. Of the remaining balance, it estimates that 2 percent will be uncollectible.

b) The center collected $3,400,000.

c) The center received a cash contribution of $70,000 to be used exclusively for residents educational and cultural programs. Of this amount, the center spent $55,000 on qualified activities during the year.

d) The center earned interest and dividends of $25,000 (cash) on its endowment of $500,000. Income from the endowment is unrestricted. However, it is the policy of the centers board of trustees that only income greater than 2 percent of the principal balance will be available for expenditures. The balance will be retained in the endowment to compensate for inflation. Thus, only $15,000 of the income was made available for expenditure.

e) The market value of the endowments investments increased by $10,000.

f) The center recognized $170,000 of depreciation on the building and $55,000 on equipment.

g) The center incurred other operating expenses of $3,500,000, of which $3,300,000 was paid in cash.

h) At year-end the center received a pledge of $4,200,000 toward the centers new building campaign. It will be paid at the rate of $1,400,000 at the end of each of the following three years. The center uses a discount rate of 3 percent to value noncurrent pledges. Based on that rate, the present value of the annuity is $3,960,040.

Label each answer with a-h.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Water Audits And Loss Control Programs Manual Of Water Supply Practices M36

Authors: AWWA Staff

3rd Edition

1583216316, 978-1583216316

More Books

Students also viewed these Accounting questions

Question

8. Explain the difference between translation and interpretation.

Answered: 1 week ago

Question

10. Discuss the complexities of language policies.

Answered: 1 week ago

Question

1. Understand how verbal and nonverbal communication differ.

Answered: 1 week ago