A private not$-$for$-$profit entity is working to create a cure for a deadly disease. The charity starts the year with one asset, cash of $$700,000.$ Net assets without donor restrictions are $$400,000.$ Net assets with donor restrictions are $$300,000.$ Of the restricted net assets, $$160,000$ is to be held to buy equipment, $$40,000$ is to be used for salaries, and the remaining $$100,000$ must be held permanently. The permanently held amount is to be invested with $70$ percent of any subsequent income used to cover advertising for fundraising purposes. The rest of the income is unrestricted.

During the current year, this health care entity has the following transactions:

Receives unrestricted cash gifts of $$210,000.$

Pays salaries of $$80,000,$ with $$20,000$ of that amount coming from purpose$-$restricted donated funds. Of the total salaries, $40$ percent is for administrative personnel. The remainder is divided evenly among individuals working on research to cure the disease and individuals employed for fundraising purposes.

Buys equipment for $$300,000$ by signing a long$-$term note for $$250,000$ and using restricted funds for the remainder. Of this equipment, $80$ percent is used in research. The remainder is split evenly between administrative activities and fundraising. The donor of the restricted funds made no stipulation about the reporting of the equipment purchase.

Collects membership dues of $$30,000$ in cash. Members receive a reasonable amount of value in exchange for these dues including a monthly newsletter that describes research activities. By the end of the year, $112/$

of this money had been earned.

Receives $$10,000$ in cash from a donor. The money must be conveyed to a separate charity doing work on a related disease.

Receives investment income of $$13,000$ from the permanently restricted net assets.

Pays $$2,000$ for advertising. The money comes from the income earned in $($f$).$

Receives an unrestricted pledge of $$100,000$ that will be collected in three years. The entity expects to collect the entire amount. The pledge has a present value of $$78,000.$ Related interest $($considered contribution revenue$)$ of $$5,000$ is earned prior to the end of the year.

Computes depreciation on the equipment bought in $($c$)$ as $$20,000.$

Spends $$93,000$ on research supplies that are used up during the year.

Owes salaries of $$5,000$ at the end of the year. None of this amount will be paid from restricted net assets. Half of the salaries are for individuals doing fundraising, and half for individuals doing research.

Receives a donated painting that qualifies as a museum piece being added to the entity$$s collection of art work that is being preserved and displayed to the public. The entity has a policy that the proceeds from any sold pieces will be used to buy replacement art. Officials do not want to record this gift if possible.

Required:

Prepare a statement of activities for this not$-$for$-$profit entity for the current year.

Prepare a statement of financial position for this not$-$for$-$profit entity for the end of the current year.