INVOLVE was incorporated as a not-for-profit voluntary health and welfare organization on January 1, 2020. During the fiscal year ended December 31, 2020, the following transactions occurred.

1. A business donated rent-free office space to the organization that would normally rent for $36,000 a year.
2. A fund drive raised $190,000 in cash and $110,000 in pledges that will be paid within one year. A state government grant of $160,000 was received for program operating costs related to public health education.
3. Salaries and fringe benefits paid during the year amounted to $209,560. At year-end, an additional $17,000 of salaries and fringe benefits were accrued.
4. A donor pledged $110,000 for construction of a new building, payable over five fiscal years, commencing in 2022. The discounted value of the pledge is expected to be $95,260.
5. Office equipment was purchased for $13,000. The useful life of the equipment is estimated to be five years. Office furniture with a fair value of $10,600 was donated by a local office supply company. The furniture has an estimated useful life of 10 years. Furniture and equipment are considered net assets without donor restrictions by INVOLVE.
6. Telephone expense for the year was $6,200, printing and postage expense was $13,000 for the year, utilities for the year were $9,300 and supplies expense was $5,300 for the year. At year-end, an immaterial amount of supplies remained on hand and the balance in accounts payable was $4,600.
7. Volunteers contributed $16,000 of time to help with answering the phones, mailing materials, and various other clerical activities.
8. It is estimated that 90 percent of the pledges made for the 2021 year will be collected. Depreciation expense is recorded for the full year on the assets recorded in item 5.
9. All expenses were allocated to program services and support services in the following percentages: public health education, 35 percent; community service, 30 percent; management and general, 20 percent; and fund-raising, 15 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.

rev: 11_04_2020_QC_CS-239471

Required

1. journal entries to record these transactions. Expense transactions should be initially recorded by object classification; in entry 10 expenses will be allocated to functions

No	Transaction	General Journal	Debit	Credit
A	01	Rent Expense	36,000
		ContributionsWithout Donor Restrictions		36,000
B	02	Contributions Receivable	110,000
		Cash	350,000
		ContributionsWith Donor RestrictionsTime
		ContributionsWithout Donor Restrictions
C	03	Salaries and Benefits Expense
		Cash
		Salaries and Benefits Payable
D	04	Contributions Receivable
		ContributionsWith Donor RestrictionsTime
		Discount on Contributions Receivable
E	05	Equipment and Furniture
		Cash
		ContributionsWithout Donor Restrictions
F	06	Telephone Expense
		Printing and Postage Expense
		Utilities Expense
		Supplies Expense
		Cash
		Accounts Payable
G	07	No Journal Entry Required
H	8(a)	Provision for Uncollectible Pledges
		Allowance for Uncollectible PledgesUnrestricted
I	8(b)	Depreciation Expense
		Allowance for DepreciationEquipment and Furniture
J	09	Public Health Education Program
		Community Service Program
		Management and General
		Fund-Raising
		Salaries and Benefits Expense
		Rent Expense
		Telephone Expense
		Printing and Postage Expense
		Supplies Expense
		Depreciation Expense
		Utilities Expense
		Provision for Uncollectible Pledges
K	10	Net Assets ReleasedSatisfaction of Purpose RestrictionWith Donor Restrictions
		Net Assets ReleasedSatisfaction of Purpose RestrictionWithout Donor Restrictions
L	11(a)	ContributionsWithout Donor Restrictions
		Net Assets Without Donor Restrictions
		Public Health Education Program
		Community Service Program
		Management and General
		Fund-Raising
M	11(b)	ContributionsWith Donor RestrictionsTime
		Net Assets Without Donor Restrictions