For a number of years, a private not$-$for$-$profit entity has been preparing financial statements that do not necessarily conform to U$.$S$.$ generally accepted accounting principles. At the end of the most recent year $($Year $2),$ those financial statements show total assets of $$900,000,$ total liabilities of $$100,000,$ net assets without donor restriction of $$400,000,$ and net assets with donor restrictions of $$400,000.$ This last category is composed of $$300,000$ in net assets with purpose restrictions and $$100,000$ in net assets that must be permanently held. At the end of Year $1,$ financial statements show total assets of $$700,000,$ total liabilities of $$60,000,$ net assets without donor restriction of $$340,000,$ and net assets with donor restrictions of $$300,000.$ This last category is composed of $$220,000$ in net assets with purpose restrictions and $$80,000$ in net assets that must be permanently held. Total expenses for Year $2$ were $$500,000$ and reported under net assets without donor restrictions. Each part that follows should be viewed as an independent situation.

Assume that, at the beginning of Year $1,$ the entity receives $$50,000$ in cash as a donation with the stipulation that the money be used to buy a bus or be returned to the donor. At that time, the entity increases cash and increases contributed revenue under net assets with donor restrictions. On the first day of Year $2,$ the $$50,000$ is spent on the bus. The entity reclassifies $$50,000$ from net assets with donor restrictions to net assets without donor restrictions. At the end of Year $2,$ the entity records $$5,000$ as depreciation expense, a figure that is shown as a reduction under net assets without donor restrictions.

Required:

What is the appropriate amount of net assets with donor restrictions to be reported at the end of Year $1?$

What is the appropriate amount of net assets without donor restrictions to be reported at the end of Year $2?$

What is the appropriate amount of expenses to be reported under net assets without donor restrictions for the year ending December $31,$ Year $2?$

What is the appropriate amount of net assets with donor restrictions to be reported at the end of Year $2?!$

Required information

$[$The following information applies to the questions displayed below.$]$

For a number of years, a private not$-$for$-$profit entity has been preparing financial statements that do not necessarily

conform to U$.$S$.$ generally accepted accounting principles. At the end of the most recent year $($Year $2),$ those financial

statements show total assets of $$900,000,$ total liabilities of $$100,000,$ net assets without donor restriction of $$400,000,$

and net assets with donor restrictions of $$400,000.$ This last category is composed of $$300,000$ in net assets with

purpose restrictions and $$100,000$ in net assets that must be permanently held. At the end of Year $1,$ financial statements

show total assets of $$700,000,$ total liabilities of $$60,000,$ net assets without donor restriction of $$340,000,$ and net assets

with donor restrictions of $$300,000.$ This last category is composed of $$220,000$ in net assets with purpose restrictions

and $$80,000$ in net assets that must be permanently held. Total expenses for Year $2$ were $$500,000$ and reported under

net assets without donor restrictions. Each part that follows should be viewed as an independent situation.

Assume that, at the beginning of Year $1,$ the entity receives $$50,000$ in cash as a donation with the stipulation that the money be used

to buy a bus or be returned to the donor. At that time, the entity increases cash and increases contributed revenue under net assets

with donor restrictions. On the first day of Year $2,$ the $$50,000$ is spent on the bus. The entity reclassifies $$50,000$ from net assets with

donor restrictions to net assets without donor restrictions. At the end of Year $2,$ the entity records $$5,000$ as depreciation expense, a

figure that is shown as a reduction under net assets without donor restrictions.

Required:

a$.$ What is the appropriate amount of net assets with donor restrictions to be reported at the end of Year $1?$

b$.$ What is the appropriate amount of net assets without donor restrictions to be reported at the end of Year $2?$

c$.$ What is the appropriate amount of expenses to be reported under net assets without donor restrictions for the year ending

December $31,$ Year $2?$

d$.$ What is the appropriate amount of net assets with donor restrictions to be reported at the end of Year $2?$