(Assignment 8.3 Describing The Financial Situation. Use the accounting transaction provided in Table 8.17) The class is Nonprofit Budgeting: Book: Budgeting and Financial Management for Nonprofit Organizations

(Assignment 8.3) Briefly describe the organization's financial situation. Explain these major elements using financial ratios in your description of the financial situation: liquidity, statement of financial position, and statement of activities.

184 BUDGETING AND FINANCIAL MANAGEMENT FOR NONPROFITS TABLE 8.17 A Nonprofit's Accounting Transactions Debit Credit Account # 1 - 11110 1 - 11111 1 - 11112 1 - 11113 1 - 11200 1 - 11201 1 - 11310 1 - 11320 1 - 11330 $52,000 $3,457 $50 $25,000 $50,000 $10,000 $20,000 $5,000 $7,500 $100,000 1 - 12110 1 - 12111 Description Cash-Operating Cash-Payroll Petty Cash CashMoney Market-Restricted Govt. Grants Receivable Govt. Grants Receivable-Restricted Foundations Receivable Corporations Receivable Individuals Receivable Facility Facility-Accum. Dep. Equipment Equipment-Accum. Dep. Long-Term Investments Accounts Payable Accrued Salary Deferred Revenue Facility Loan Fund Balance Unrestricted Fund Balance-Temp. Rest. Fund Balance Perm. Rest. $80.000 $10,000 $6.000 $250,000 1 - 12210 1 - 12211 1 - 13110 1 - 21110 1 - 21111 1 - 21210 1 - 21410 1 - 31110 1 - 31112 1 - 31113 1 - 41110 1 - 41111 1 - 41210 1 - 41211 1 - 41210 1 - 41510 $35,175 $2,500 $5,000 $20,000 $149,332 $35,000 $200,000 $400,000 $300,000 Federal Grants (Program Inc.) State Grants (Program Inc.) Foundation Contributions Corporation Contributions Individual Contributions Investment IncomeOp. Salaries-Management Salaries-Statt Salaries Other Payroll Taxes Health Insurance Disability Insurance $720,000 $125,000 $185,000 $10.000 1 - 51110 1 - 51111 1 - 51112 1 - 51210 1 - 51310 $300,000 $700,000 $100,000 $67,000 $200,000 $25,000 1 - 51311 Financial Tools for Informed Decision Making 185 Credit Account 1-51410 1 - 51411 1 - 51412 1 - 51413 1 - 51414 1 - 51417 1 - 51420 1 - 51421 1 - 51422 Description Program Services Depreciation - Facility Depreciation Equipment Custodial Costs Interest Supplies - Admin Legal Fees Accounting Fees Miscellaneous Total Debit $200,000 $10.000 $1,000 $110,000 $1,000 $6,500 $1,500 $4,000 $14,000 $2,273.007 $2,273,007 ASSIGNMENTS For all three of the following assignments, use the accounting transactions pro- vided in Table 8.17. ASSIGNMENT 8.1. CREATING A STATEMENT OF FINANCIAL POSITION Create a statement of financial position as of December 31, 2009, with the three net asset classes displayed. ASSIGNMENT 8.2. CREATING A STATEMENT OF ACTIVITIES Create a statement of activities for the period January 1, 2009, through Decem- ber 31, 2009. Use major revenue and expense categories only. ASSIGNMENT 8.3. DESCRIBING THE FINANCIAL SITUATION Briefly describe the organization's financial situation. Explain these major ele- ments using financial ratios in your description of the financial situation: liquid- ity, statement of financial position, and statement of activities. KEY TERMS Cash-flow management report (p. 166) Endowment draw (p. 163) General support revenue (p. 163) Receivables (p. 166)