I have 4NONPROFIT & GOVERNMENTAL ACCOUNTING questions

4). River City government has a payroll department that handles the processing of payroll for all city employees. The responsibilities of the payroll department relate to full-time, part-time and contractual employees and include: obtaining information from new employees so they can be added to the payroll; having new employees complete payroll withholding and deduction forms; collecting time sheets; calculating gross pay, appropriate deductions and employer contributions for each pay period; and completing vouchers for contributions and withholdings. The annual budget of the payroll department is

Salaries and fringe benefits Materials and supplies Computer costs

Checks written Square feet of office space utilized

$117,000 $ 16,000 $ 11,000

100,000 1,000

The city charges the payroll department an indirect overhead cost rate based on the number of square feet of office space utilized. The overhead rate is currently $9 per square foot. The overhead rate is intended to cover maintenance costs, utilities, and equipment depreciation.

Recently, River City has begun to wonder if it would be more economical to contract for its payroll services. The City's budget administrator contacted a neighboring city and learned that the neighboring city was paying $1.50/check for its payroll function.

Required: [10 pts.]

(a). Calculate River City payroll department's cost per check. Based on costs would it be cheaper to maintain the payroll department or contract out for the payroll services? (b).Discuss what other information you would want before making a decision about retaining or contracting payroll.

8). The Shelter Association of Gogebic County receives the majority of its funding from the local chapter of the United Way. That federated fund-raising organization has this policy:

If a member agency reports unrestricted net assets in excess of one year's budgeted revenues and support, the excess will be deducted from its allocation for next year. The association's reporting year ends December 31st, and unrestricted net assets are just about equal to last year's revenues and support.

On December 30, Bill Olson contacts the Shelter Association about making a large contribution. It is important to Bill to make the gift in the current calendar year so that he can deduct the charitable contribution on his personal federal income tax return. However, Bill has heard that the treasurer of the association and several board members recently resigned after allegations of financial misstatements were made. He is considering restricting his gift for the direct purposes of acquiring food, clothing and supplies for the homeless over the next several years so that management could use none of the money for overhead expenses.

Required: [10 pts.] TAKE THE POSITION OF THE ASSOCIATION'S CPA

.a). Do you recommend that the association advise Mr. Olsen to make the gift unrestricted or restricted? Give your reasons.

.b). Mr. Olsen asks you how he can be sure that the association spends his contribution as he intends, assuming that he restricts the purpose of his gift, as well as efficiently and effectively. Explain to Mr. Olsen what kind of public information is available to him. Do you consider that information adequate to assess whether the not-for-profit agency was efficient and effective in its use of public donations?

1a)

7.

Elizabeth College, a private college, has the following pre-closing trial balance for revenue and expenses.

Debits

Credits

5,429,630 1,891,000 1,201,200 1,000,000

94,370 8,500 3,040

Student tuition and fees (net) Contributions - Unrestricted Contributions - Temporarily Restricted Contributions - Permanently Restricted Auxiliary enterprise sales and services Unrealized gain on investments - Unrestricted Unrealized gain on investments - Permanently Restricted Net Assets Released from Restrictions - Temporarily Restricted Net Assets Released from Restrictions - Unrestricted Instruction expense

Academic support expenses Student services expenses Institutional support expenses Auxiliary enterprises expenses

450,000 450,000

4,350,790 1,999,450 87,980 501,130 133,410

Prepare a statement of activities, in good form, for the year ended June 30, 2008.

Assume beginning net asset amounts of $7,518,000 unrestricted net assets, $200,000 temporarily restricted net assets and $5,000,000 permanently restricted net assets.

1a)

6). Required: [15 pts.]

Prepare a statement of revenues, expenses, and changes in net assets for Patrick County Hospital for 20X0 given the following information.

Gross patient service charges ............................................................................. Unrestricted contributions .................................................................................. Gain on sale of capital assets.............................................................................. Charity services (at gross amounts) included in the above ................................ State appropriationsoperating......................................................................... State appropriationscapital ............................................................................. Estimated uncollectible accounts ....................................................................... Contractual adjustments ..................................................................................... Nursing services expense ................................................................................... Other professional services expense .................................................................. General services expenses .................................................................................. Administrative expenses .................................................................................... Fiscal service expenses....................................................................................... DepreciationBuilding ..................................................................................... DepreciationOther .......................................................................................... Income from investments of endowmentdonor restricted to heart research .. Cafeteria sales ................................................................................................ Federal grant restricted for heart research (all eligibility requirements met) .... Proceeds from bond issue for building addition................................................. Unrestricted net assets, January 1 ...................................................................... Restricted net assets, January 1 .......................................................................... Invested in capital assets, net of related debt, January 1 ....................................

$18,000,000 350,000 75,000 500,000 500,000 500,000 710,000 1,100,000 8,000,000 890,000 1,100,000 440,000 300,000 1,400,000 2,740,000 870,000 444,000 1,300,000 22,000,000 9,000,000 3,200,000 15,000,000

4). River City government has a payroll department that handles the processing of payroll for all city employees. The responsibilities of the payroll department relate to full-time, part-time and contractual employees and include: obtaining information from new employees so they can be added to the payroll; having new employees complete payroll withholding and deduction forms; collecting time sheets; calculating gross pay, appropriate deductions and employer contributions for each pay period; and completing vouchers for contributions and withholdings. The annual budget of the payroll department is Salaries and fringe benefits Materials and supplies Computer costs Checks written Square feet of office space utilized $117,000 $ 16,000 $ 11,000 100,000 1,000 The city charges the payroll department an indirect overhead cost rate based on the number of square feet of office space utilized. The overhead rate is currently $9 per square foot. The overhead rate is intended to cover maintenance costs, utilities, and equipment depreciation. Recently, River City has begun to wonder if it would be more economical to contract for its payroll services. The City's budget administrator contacted a neighboring city and learned that the neighboring city was paying $1.50/check for its payroll function. Required: [10 pts.] (a). Calculate River City payroll department's cost per check. Based on costs would it be cheaper to maintain the payroll department or contract out for the payroll services? (b).Discuss what other information you would want before making a decision about retaining or contracting payroll. 8). The Shelter Association of Gogebic County receives the majority of its funding from the local chapter of the United Way. That federated fund-raising organization has this policy: If a member agency reports unrestricted net assets in excess of one year's budgeted revenues and support, the excess will be deducted from its allocation for next year. The association's reporting year ends December 31st, and unrestricted net assets are just about equal to last year's revenues and support. On December 30, Bill Olson contacts the Shelter Association about making a large contribution. It is important to Bill to make the gift in the current calendar year so that he can deduct the charitable contribution on his personal federal income tax return. However, Bill has heard that the treasurer of the association and several board members recently resigned after allegations of financial misstatements were made. He is considering restricting his gift for the direct purposes of acquiring food, clothing and supplies for the homeless over the next several years so that management could use none of the money for overhead expenses. Required: [10 pts.] TAKE THE POSITION OF THE ASSOCIATION'S CPA . a). Do you recommend that the association advise Mr. Olsen to make the gift unrestricted or restricted? Give your reasons. . b). Mr. Olsen asks you how he can be sure that the association spends his contribution as he intends, assuming that he restricts the purpose of his gift, as well as efficiently and effectively. Explain to Mr. Olsen what kind of public information is available to him. Do you consider that information adequate to assess whether the not-for-profit agency was efficient and effective in its use of public donations