Chapter 12 Problem 18
Indicate whether each of the following actions would result in a change in unrestricted, temporarily restricted, or permanently restricted net assets this year: a. A donor gives the organization a cash contribution to be used for expanding the organization's food pantry program. b. The organization earns an unrealized gain on its permanent endowment. c. A donor pledges money to the organization but has not paid it yet. The donor does not indicate how the money is to be used. d. The organization sells goods from its online bookstore. e. A do not gives the organization cash and specifies that the money is to be used in four years. f. A donor gives 1,000 shares of Apple stock, and stipulates the proceeds of the stock are not to be spend but held in perpetuity. The Abby Arboretum (AA) has several programs, each of which has its own fund. AA also has several other important funds such as a Debt Service Fund and an Operating Fund (which handles all unrestricted transactions). For the following events, show the effect on the fundamental equation of accounting for each of the affected funds. a. The Environmental Program borrows money from the Operating Fund to hire a consultant for $10,000. They money is expected to be repaid in six months when a foundation grant is scheduled for receipt. b. AA transfers $20,000 to the Debt Service Fund, $2,000 of which is interest, to pay back a tax-exempt bond. c. AA charges out its Operations Department to each program equally, at $1,000 each, for services performed to maintain property, plant, and equipment. For Youth Agency (FYA) is a voluntary health and welfare organization that provides counseling and recreation programs for youthful offenders and delinquents. FYA's programs are financed through a contract with the county in which it is located and through contributions from local citizens. Its contract with the county provides for reimbursement of allowable costs based on monthly billings to the county. FYA uses the accrual basis of accounting, and the following transactions occurred during 2013. FYA received pledges of gifts in the amount of $25,000, to be used as the FYA board of directors considers appropriate. FYA collected $17,000 cash on the pledges received in transaction 1. FYA received a gift of Intel stock that had a fair market value of $1, 300 total at the time of the gift. The donor sent FYA's president a letter with the gift, saying that proceeds of the stock should be used only to purchase athletic equipment for the basketball team. FYA sold the stock upon receipt. FYA paid $800 cash for athletic equipment, using some of the proceeds received in transaction 3. The expense was charged to the Recreation programs account. DYA spend $12,000 cash on the following: $8,000 for Counseling programs; $3,000 for Recreation programs; and $1,000 for Administration. FYA billed the county $6, 500 for costs incurred under its contract. A licensed social worker in the area donated 100 hour of her time to FYA. Her normal hourly rate is $50 per hour. The CEO appreciates the donation because otherwise he would have to purchase the counseling services. FYA borrowed $10,000 from the local bank $1, 600, of which $400 was interest. FYA recorded $300 of depreciation for the year. FYA determined that it will not be able to collect $1, 500 of pledges made in 2013. Record the above transactions. Then, using the beginning balanced in this table, produce the balance sheet, activity statement, and cash show statement
