Assume you are the accountant working for the Victoria Senior Center (VSC). Following are the preclosing trial balances of VSC as of December 31, 2020.

 

                                                                                          

(in thousands)		Debit	Credit
Cash		$4,000
Cash (with donor restrictions)		600
Pledges receivable		1000
Allowance for uncollectible pledges			300
Pledges receivable (with donor restrictions)		500
Investments		3200
Accrued interest receivable		100
Net assets, January 1, 2020			6700
Net assets (with donor restrictions), January 1, 2020			2000
Contributions			1000
Contributions (with donor restrictions)			500
Membership dues			1500
Program service fees			3000
Grant from county			2500
Grant from state			2500
Unrealized and realized gains on investments			200
Investment income			100
Luncheon program expenses		7200
Recreation program expenses		3400
Administration and fundraising expenses		300
Net assets with donor restrictions – released from restrictions		400
Net assets without donor restrictions - released from restrictions			400

(1) Prepare a statement of financial position a statement of activities at and for the year ended December 31, 2020.

(2) After reviewing the financial statements, the trustees of VSC want you to make the following changes. How do you respond?

a. VSC spent $5,000 to prepare and mail a brochure to potential contributors. The brochure contained general information about the center, described its accomplishments, pointed out that a contribution of $10 would provide 1 free dinner to a senior citizen in town. The trustees want you to record the cost to the Luncheon program.

b. Professional lawyers volunteered to perform all the legal services required by VSC. The trustees have questions about the legal fees recorded in the administration expense account, and tell you: “We didn’t pay for these services, so there’s really no point in recording any expenses for them.”