Journal Entries and Financial Statements

The Southside Counseling Center was established on January $10,2023,$ to provide a variety of counseling services to community residents, including marital and family counseling and treatment for alcoholism and drug abuse. The center$$s initial resources were provided by a private foundation in the form of a $$2,500,000$ grant. Of this sum, the foundation designated $$1,000,000$ for building and equipment and $$750,000$ for the establishment of a special program for counseling parolees. The following transactions occurred during $2023$:

$1.$ Unrestricted cash contributions of $$1,200,000$ were received through the local United Way campaign. An additional $$140,000$ was received in direct cash contributions, of which $$20,000$ is restricted to the parolees$$ program and $$50,000$ was for the building fund. Documented promises of $$60,000$ were received, collectible within the next year. These promises are unrestricted and expected to be $85$ percent collectible. Bad debt expense is included with administrative expenses.

$2.$ Out$-$of$-$pocket operating expenses for the year were $$1,400,000.$ Of the total, $$950,000$ are program expenses, $$350,000$ are administrative expenses, and the remainder are fund$-$raising expenses. $$100,000$ of the expenses were unpaid at year$-$end.

$3.$ The special parolees$$ program had not yet begun as of December $31,2023.$ All resources dedicated to this program were invested in short$-$term securities$.$ Investment income for the year, which was reinvested, was $$30,000.$ There are no unrealized gains or losses on the securities$.$

$4.$ The center obtained a $$2,400,000$ mortgage to purchase a building, and obtained a $$300,000$ three$-$year note to purchase equipment. The center also used the grant to finance these purchases; the total cost of the building and equipment was $$3,700,000.$

$5.$ Interest of $$140,000$ was accrued and paid on the mortgage and note, all allocated to administrative expenses.

$6.$ Depreciation on the building and equipment is $$190,000,$ all allocated to program expenses.

a$.$ Prepare journal entries to record the transactions for $2023.$

General Journal

Ref. Description Debit Credit

Restricted cash Answer

$0$

Answer

$0$

Answer

Answer

$0$

Answer

$0$

Answer

Answer

$0$

Answer

$0$

Contributions revenue $-$ unrestricted Answer

$0$

Answer

$0$

To record receipt of initial resources provided by a private foundation.

$1$ Cash Answer

$0$

Answer

$0$

Restricted cash Answer

$0$

Answer

$0$

Administrative expense Answer

$0$

Answer

$0$

Answer

Answer

$0$

Answer

$0$

Answer

Answer

$0$

Answer

$0$

Contributions revenue $-$unrestricted Answer

$0$

Answer

$0$

Contributions revenue $-$ restricted Answer

$0$

Answer

$0$

To record contributions and promises.

$2$ Answer

Answer

$0$

Answer

$0$

Administrative expenses Answer

$0$

Answer

$0$

Fund$-$raising expenses Answer

$0$

Answer

$0$

Accounts payable Answer

$0$

Answer

$0$

Answer

Answer

$0$

Answer

$0$

To record out$-$of$-$pocket operating expenses.

$3$ Answer

Answer

$0$

Answer

$0$

Cash Answer

$0$

Answer

$0$

Answer

Answer

$0$

Answer

$0$

To record the investment income.

$4$ Answer

Answer

$0$

Answer

$0$

Answer

Answer

$0$

Answer

$0$

To record reclassification of net assets.

Answer

Answer

$0$

Answer

$0$

Note payable Answer

$0$

Answer

$0$

Restricted cash Answer

$0$

Answer

$0$

Answer

Answer

$0$

Answer

$0$

To record purchase of building.

$5$ Answer

Answer

$0$

Answer

$0$

Answer

Answer

$0$

Answer

$0$

To record payment of accrued interest on mortgage and note.

$6$ Answer

Answer

$0$

Answer

$0$

Answer

Answer

$0$

Answer

$0$

To record depreciation on building and equipment.

b$.$ Prepare Southside$$s statement of activities for $2023$ and its statement of financial position at December $31,2023.$

Use a negative sign with an answer for net assets released from restrictions and change in net assets, if appropriate. Otherwise, do not use negative signs.

Note: Not all accounts will have a balance. If the balance is zero for a listed account, leave answer field blank $($or enter zero$).$

Southside Counseling Center

Statement of Activities

For the Year Ended December $31,2023$

Net Assets

Without Donor

Restrictions Net Assets

With Donor

Restrictions

Revenues, gains, and other support:

Contributions$-$General Answer

$0$

Answer

$0$

Contributions$-$Grant Answer

$0$

Answer

$0$

Contributions$-$Parolee program Answer

$0$

Answer

$0$

Contributions$-$Building fund Answer

$0$

Answer

$0$

Investment income Answer

$0$

Answer

$0$

Net assets released from restrictions Answer

$0$

Answer

$0$

Total revenues, gains and other support Answer

$0$

Answer

$0$

Expenses:

Program expenses Answer

$0$

Answer

$0$

Administrative expenses Answer

$0$

Answer

$0$

Fund$-$raising expenses Answer

$0$

Answer

$0$

Total expenses Answer

$0$

Answer

$0$

Change in net assets Answer

$0$

Answer

$0$

Net assets, January $1,2023$ Answer

$0$

Answer

$0$

Net assets, December $31,2023$ Answer

$0$

Answer

$0$

Southside Counseling Center

Statement of Financial Position

December $31,2023$

A