Question
expert only!!! Journal Entries and Financial Statements The Southside Counseling Center was established on January 10, 2023, to provide a variety of counseling services to
expert only!!!
Journal Entries and Financial Statements
The Southside Counseling Center was established on January 10, 2023, to provide a variety of counseling services to community residents, including marital and family counseling and treatment for alcoholism and drug abuse. The center's initial resources were provided by a private foundation in the form of a $2,500,000 grant. Of this sum, the foundation designated $1,000,000 for building and equipment and $750,000 for the establishment of a special program for counseling parolees. The following transactions occurred during 2023:
- Unrestricted cash contributions of $1,200,000 were received through the local United Way campaign. An additional $140,000 was received in direct cash contributions, of which $20,000 is restricted to the parolees' program and $50,000 was for the building fund. Documented promises of $60,000 were received, collectible within the next year. These promises are unrestricted and expected to be 85 percent collectible. Bad debt expense is included with administrative expenses.
- Out-of-pocket operating expenses for the year were $1.400,000. Of the total, $950,000 are program expenses, $350,000 are administrative expenses, and the remainder are fundraising expenses. $100,000 of the expenses were unpaid at year-end.
- The special parolees' program had not yet begun as of December 31, 2023. All resources dedicated to this program were invested in short-term securities.Investment income for the year, which was reinvested, was $30,000. There are no unrealized gains or losses on the securities.
- The center obtained a $2,400,000 mortgage to purchase a building, and obtained a $300,000 three-year note to purchase equipment. The center also used the grant to finance these purchases; the total cost of the building and equipment was $3,700,000.
- Interest of $140,000 was accrued and paid on the mortgage and note, all allocated to administrative expenses.
- Depreciation on the building and equipment is $190,000, all allocated to program expenses.
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