Accounting consolidation
Falrchlld Centre is an NFPO funded by government grants and private donations. It was established on January 1, Year 5, to provide counseling services and a drop-in centre for single parents. On January 1, Year 5, the centre leased an old warehouse in the central part of Smalvllle for $1,100 per month. It carried out minor renovations in the warehouse to create a large open area for use as a play area for children and three offices for use by the executive director and counsellors. The lease ans from January 'I, Year 5, to June 3-0, Year 7. By that time, the centre hopes to move Into new quarters that are more sultablefor the activities carried out. The following schedule summarizes the cash flows for the year ended December 31, Year 5: Cash inows: Government grant foroperating poets {Note 1) 5 33,000 Donations from individuals with no restrictions 39,000 Donations from individuals for rent of warehwee for 2% years 33,000 Donations from individuals for purchase of land { Note 3) 35,230 143,230 Cash outows: Renovations of warehouse 24,000 Salary of executive director (Note 4) 15,400 Fees paid to counsellors {Note 4) 15,000 Rent paid for 2% years 33,000 Other operating expenses 15 500 106,900 Cash, and of year 5 35330 ' Additional Information 1. The provincial govemment agreed to provide an operating grant of $33,000 per year. In addition, the government has pledged to match contributions collected by the centre for the purchase of land for construction of a new complex for the centre. The maximum contribution by the government toward the purchaseof land is $66,000. 2. The centre has signed an agreement to purchase a property In the downtown area omeallelle for $148,500. There Is an old house on the property, which is currently used as a rooming house. The closing date is any time between July 1, Year 6, and December 31, Year 6. The centre plans to demolish the existing house and build a new complex. 3. The centre has recently commenced a tundraising program to raise fundsto purchase the land and constructa new building. Sofar, $33,200 has been raised from individuals toward the purchase of the land. In the new year, the centre will focus its efforts to solicit donations from businesses In the area. The provincial government will advance the funds promised under its pledge on the closing date for the purchase of the property. 4. All the people working for the centre are volunteers except for the executive director and the counsellors. The executive director receives a salary of $16,800 a year, while the counsellors bil the centre for professional services rendered based on the number of hours they work at the centre. The director has not yet received her salary for the month of December. One of the counsellors received an advance of $600 in December, Year 5, for work to be performed In January, Year 6. 5. The centre wishes to use the defenal method of accounting for contributions and to segregate its net assets between restricted and unrestricted. It capitalizes the cost of capital assets and an'iorlizes the capital assets over their useful lives. Required: {at Prepare the journal entry to record the pledge, If applicable. (Omit 5 sign in your response.) Required: (a) Prepare the journal entry to record the pledge, if applicable. (Omit $ sign in your response.) General Journal Debit Credit (Click to select) (Click to select) (b) Prepare a statement of operations for the Fairchild Centre for the year ended December 31, Year 5. (Input all amounts as positive values. Omit $ sign in your response.) FAIRCHILD CENTRE Statement of Operations Year ended December 31, Year 5 Revenues Operating grant from provincial government Donations from individuals - unrestricted Donations for rent of warehouse Expenses Salary of executive director Fees earned by counsellors Rent expense Amortization of leasehold improvements Other operating expenses Excess of revenues over expenses (c) Prepare a statement of changes in net assets for the Fairchild Centre for the year ended December 31, Year 5. (Leave no cell blank, be sure to enter "0" wherever required. Omit $ sign in your response.) FAIRCHILD CENTRE Statement of Changes in Net Assets Year ended December 31, Year 5 Net assets Restricted for Unrestricted Net Land purchase Assets Total Balance, beginning of year $ $ $ Contributions for purchase of land Pledge for purchase of land Excess of revenues over expenses Balance, end of year $ $ $ References
