Question
A private not-for-profit entity is working to create a cure for a deadly disease. The charity starts the year with cash of $718,000. Of this
A private not-for-profit entity is working to create a cure for a deadly disease. The charity starts the year with cash of $718,000. Of this amount, unrestricted net assets total $406,000, temporarily restricted net assets total $206,000, and permanently restricted net assets total $106,000. Within the temporarily restricted net assets, the entity must use 80 percent for equipment and the rest for salaries. No implied time restriction has been designated for the equipment when purchased. For the permanently restricted net assets, 70 percent of resulting income must be used to cover the purchase of advertising for fund-raising purposes and the rest is unrestricted.
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