Question
INVOLVE was incorporated as a not-for-profit voluntary health and welfare organization on January 1, 2017. During the fiscal year ended December 31, 2017, the following
INVOLVE was incorporated as a not-for-profit voluntary health and welfare organization on January 1, 2017. During the fiscal year ended December 31, 2017, the following transactions occurred. |
1. | A business donated rent-free office space to the organization that would normally rent for $35,700 a year. |
2. | A fund drive raised $188,500 in cash and $107,000 in pledges that will be paid within one year. A state government grant of $157,000 was received for program operating cost related to public health education. |
3. | Salaries and fringe benefits paid during the year amounted to $209,260. At year-end, an additional $16,700 of salaries and fringe benefits were accrued. |
4. | A donor pledged $107,000 for construction of a new building, payable over five fiscal years, commencing in 2019. The discounted value of the pledge is expected to be $94,960. |
5. | Office equipment was purchased for $12,700. The useful life of the equipment is estimated to be 4 years. Office furniture with a fair value of $10,300 was donated by a local office supply company. The furniture has an estimated useful life of 10 years. Furniture and equipment are considered unrestricted net assets by INVOLVE. |
6. | Telephone expense for the year was $5,900, printing and postage expense was $12,700 for the year, utilities for the year were $9,000 and supplies expense was $5,000 for the year. At year-end, an immaterial amount of supplies remained on hand and the balance in accounts payable was $4,300. |
7. | Volunteers contributed $15,700 of time to help with answering the phones, mailing materials, and various other clerical activities. |
8. | It is estimated that 80 percent of the pledges made for the 2018 year will be collected. Depreciation expense is recorded for the full year on the assets recorded in item 5. |
9. | Salaries and wages, and other expenses (except for the provision for uncollectible accounts which is allocated 100 percent to fund-raising) were allocated to program services and support services in the following percentages: public health education, 40 percent; community service, 20 percent; management and general, 20 percent; and fund-raising, 20 percent. |
10. | Net assets were released to reflect satisfaction of state grant requirements that the grant resources be used for public health education program purposes. |
11. | All nominal accounts were closed to the appropriate net asset accounts. |
Required | |
a. | Prepare journal entries to record these transactions. Expense transactions should be initially recorded by object classification; in entry 10 expenses will be allocated to functions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Round the intermediate and final answers to the nearest dollar amount.) |
b. | Prepare a statement of activities for the year ended December 31, 2017. (Negative amounts should be indicated by a minus sign. Round the intermediate and final answers to the nearest dollar amount.) |
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