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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
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.
- A business donated rent-free office space to the organization that would normally rent for $35,300 a year.
- A fund drive raised $186,500 in cash and $103,000 in pledges that will be paid within one year. A state government grant of $153,000 was received for program operating costs related to public health education.
- Salaries and fringe benefits paid during the year amounted to $208,860. At year-end, an additional $16,300 of salaries and fringe benefits were accrued.
- A donor pledged $103,000 for construction of a new building, payable over five fiscal years, commencing in 2022. The discounted value of the pledge is expected to be $94,560.
- Office equipment was purchased for $12,300. The useful life of the equipment is estimated to be four years. Office furniture with a fair value of $9,900 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.
- Telephone expense for the year was $5,500, printing and postage expense was $12,300 for the year, utilities for the year were $8,600 and supplies expense was $4,600 for the year. At year-end, an immaterial amount of supplies remained on hand and the balance in accounts payable was $3,900.
- Volunteers contributed $15,300 of time to help with answering the phones, mailing materials, and various other clerical activities.
- It is estimated that 80 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.
- All expenses 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.
- Net assets were released to reflect satisfaction of state grant requirements that the grant resources be used for public health education program purposes.
- All nominal accounts were closed to the appropriate net asset accounts.
Required
- 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", Round the intermediate and final answers to the nearest dollar amount.)
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