A private not-for-profit entity is working to create a cure for a deadly disease. The charity starts the year with cash of $772,000. Of this amount, unrestricted net assets total $424,000, temporarily restricted net assets total $224,000, and permanently restricted net assets total $124,000. 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.

During the current year, the organization has the following transactions:

• Received unrestricted cash gifts of $234,000.
• Paid salaries of $104,000 with $44,000 of that amount coming from restricted funds. Of the total salaries, 60 percent is for administrative personnel and the remainder is evenly divided among individuals working on research to cure the designated disease and individuals employed for fund-raising purposes.
• Bought equipment for $348,000 with a long-term note signed for $274,000 and restricted funds used for the remainder. Of this equipment, 80 percent is used in research, 10 percent is used in administration, and the remainder is used for fund-raising.
• Collected membership dues of $54,000. The members receive a reasonable amount of value in exchange for these dues including a monthly newsletter describing research activities.
• Received $34,000 from a donor that must be conveyed to another charity doing work on a related disease.
• Received investment income of $37,000 generated by the permanently restricted net assets. As mentioned above, the donor has stipulated that 70 percent of the income is to be used for advertising, and the remainder may be used at the entitys discretion.
• Paid advertising of $4,400.
• Received an unrestricted pledge of $340,000 that will be collected in three years. The entity expects to collect the entire amount. The pledge has a present value of $102,000 and related interest (additional contributed support) of $5,400 in the year.
• Computed depreciation on the equipment acquired as $44,000.
• Spent $117,000 on research supplies that it utilized during the year.
• Owed salaries of $29,000 at the end of the year. Half of this amount is for individuals doing fund-raising and half for individuals doing research.
• Received a donated painting that qualifies as a museum piece. It has a value of $1,040,000. Officials do not want to record this gift if possible.

1. Prepare a statement of activities for this not-for-profit entity for this year.

2. Prepare a statement of financial position for this not-for-profit entity for this year.

Required A Required B Prepare a statement of activities for this not-for-profit entity for this year Statement of Activities Permanently Restricted Net Assets Temporarily Restricted Unrestricted Net Assets Net Assets Public support 234,000 S 102.000 Contributions Contribution interest 5,400 Revenue 54,000 Membership dues Investment income 11.100 25,900 122,400 Net assets released from restriction (122,400) Total public support and revenue 0 Expenses Program service expenses cure disease s Salaries 48,800 Depreciation 35,200 117,000 Supplies Total 200,800 S Supporting service expenses general and administrative S Salaries 62,400 Depreciation 4,400 Total 66,800 0 0 Fundraising 48,600 Salaries 4,400 Advertising Depreciation 4,400 Total 57,400 S Total expensses 325,000 0 125,000 S 10,900 S Change in net assets Net assets Beginning of year 224.000 424,000 124,000 Net assets End of year 549,000 234,900 124,000 Required A Required B