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For the People (FTP) is a not-for-profit organization that assists refugees with various services including language and cultural training, transportation, a food bank, and translation
For the People (FTP) is a not-for-profit organization that assists refugees with various services including language and cultural training, transportation, a food bank, and translation services. Some selected transactions for FTP are presented below. a. FTP received a $400,000 cheque from a local radio station. The letter that came with the donation says that it can be used by FTP on whatever needs are most urgent. b. FTP received a $100,000 donation from the Literacy Fund for a new homework assistance project. The project is expected to start in a few months. c. FTP received a $75,000 endowment contribution from Dr. Dre for a scholarship fund. d. FTP received a donation of 100 student desks for its homework assistance project from City Office Supplies Ltd. The student desks are valued at $90,000 and are expected to last 15 years. e. The city donated a tract of land, valued at $125,000 to FTP which plans to raise funds to constract a new center on the land. f. Assume that the homework assistance project is underway. The $100,000 in part b. has been spent on materials and a part-time instructor. g. Assume that at the end of the year, the endowment contribution in part c. earned $2,500 in interest. Dr. Dre had specified that the interest must be spent on future scholarships. FTP will wait until there ist at least $10,000 in accumulated interest before distributing any scholarships. h. At the end of the year, FTP records depreciation on the student desks using the straightline method. Required: Prepare the journal entries to record the above transactions on FTP's books using a. the deferral method, and b. the restricted fund method
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