Assignment 8.3 Describing The Financial Situation. Use the accounting transaction provided in Table 8.17)

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)