Kezar Cares, a VHWO that offers counseling services to abused persons of all ages, is formed at the beginning of 2013. It receives contributions from various sources and performs counseling services under a government contract. Kezar classifies expenses by object of account (salaries and other) within four major functions-counseling program, education program, administration, and fund-raising. Kezar uses fund accounting because it believes fund accounting is useful for internal accounting purposes. It prepares financial statements, however, in accordance with generally accepted accounting principles. Kezar uses a UCF, an RCF, an EF, and a PF, Donor gifts with time or purpose restrictions are recorded in the RCF, Resources received and expenses incurred under the government contract are also recorded in the RCF, even though the net assets are not donor restricted, because Kezar believes it will improve controls over contract costs. To simplify its accounting. Kezar accounts for its capital assets in the UCF and uses the PF to account only for financial resources that will be used to acquire capital assets. Kezar has the following transactions in 2013. For each transaction, the fund in which the transaction is recorded is shown in bold type to the left of the journal entry, and the net asset classification, where applicable, is shown in bold type within the journal entry. \begin{tabular}{|c|c|c|c|c|c|c|c|c|} \hline \multirow[t]{3}{*}{ 1)- } & \multicolumn{8}{|c|}{ At the beginning of the year, Kezar receives unrestricted promises of cash donations in the } \\ \hline & amount of & 130,000 & \multicolumn{3}{|c|}{ Kezar expects to collect } & 100,000 of that am & \multicolumn{2}{|c|}{ of that amount in 2013 and } \\ \hline & \multicolumn{2}{|c|}{ estimates that } & 30,000 & \multicolumn{5}{|c|}{ will notbe collected. } \\ \hline \multirow[t]{3}{*}{ 2)- } & \multicolumn{2}{|c|}{ Kezar collects } & 118,000 & \multicolumn{5}{|c|}{ of the unrestricted promises to donate cash and writes off } \\ \hline & 12,000 & \multicolumn{4}{|c|}{ as uncollectible. It reverses the remaining } & \multicolumn{3}{|c|}{ allowance for uncollectible } \\ \hline & \multicolumn{8}{|c|}{ receivables. (Notice that the effect of the reversal is to increase unrestricted support.) } \\ \hline \multirow[t]{6}{*}{ 3)- } & \multicolumn{8}{|c|}{ Kezar receives two donations that contain restrictions imposed by the donors: } \\ \hline & \multirow{2}{*}{ a)- } & \multicolumn{3}{|c|}{ cash in the amount of 20,000} & \multicolumn{4}{|c|}{ that can be used only for research into counseling } \\ \hline & & \multicolumn{7}{|c|}{ methodology and } \\ \hline & b)- & \multicolumn{4}{|c|}{ investments that have a fair value of } & 100,000 The donor & making th & le second \\ \hline & & contributi & ion stipulat & res that the in & investment & corpus should be mair & ntained in & perpetuity. \\ \hline & & but the in & vestment in & come may be & used for & any purpose the Kezc & ar trustees & designate. \\ \hline 4)- & Kezar rece & eives the f & ollowing d & onated servi & ices: & & & \\ \hline & a)- & A psychol & logist donat & tes & 20 & hours of her time to & Kezar's co & unseling \\ \hline & & program. & Kezar woul & d have paid & 4,000 & for these services if & they had & notbeen \\ \hline & & donated. & & & & & & \\ \hline & b)- & A lawyer & donates & 10 & hours of h & his time to review a co & ontract Ke & zar is \\ \hline & & negotiatin & in with a go & overnment. H & He would no & ormally charge Kezar & 2,000 & for the \\ \hline & & services. & & & & & & \\ \hline 5)- & Kezar hold & ds a book s & sale as par & to of its fund & -raising pr & ogram. It raises & 12,000 & in cash \\ \hline & but pays & 2,000 & of that an & nount for var & rious exper & nses. Several high sch & ool studer & its donate \\ \hline & 16 & hours of & their time, & selling refre & eshments ar & nd books at the event. & Kezar wo & uld have \\ \hline & paid them & 5 & an hour fc & or these serv & vices had + & hey not been donated & & \\ \hline 6)- & Kezar pays & s salaries & & 14,000 & and other & expenses of & 2,000 & in \\ \hline & performing & 9 research & into couns & seling methoc & dology, usi & ing the restricted gift & in transa & ction 3. \\ \hline 7)- & Income of & 4,000 & is earned & and receivec & d on the in & ivestments in the endo & wment fur & \\ \hline 8)- & Kezar's con & ontract wit & th a governt & mentagency & for counse & eling services provide & is for quar & terly \\ \hline & advance pa & ayments. A & At the end o & of each quar & ter, Kezar & is required to submit & a stateme & nt of actual \\ \hline & costs incur & Irred. Base & d on the st & atement, Kez & zar is entit & Hed to receive the dif & ference b & etween \\ \hline & the advanc & ce and its & actual cost & rs. In accord & dance with & these arrangements, K & Kezar rece & ives an \\ \hline & advance pa & ayment of & 27.000 & on October & 1 and incu & urs actual costs of & 30,000 & \\ \hline & C & 26,000 & salari & ies and & 4,000 & other cost) & between & October 1 \\ \hline & and Decem & nber 31,2 & 013. & & & & & \\ \hline 9)- & Kezar incu & urs the fol & lowing exp & enses in und & dertaking it & is unrestricted progra & ams. All the & expenses \\ \hline & are paid in & n cash, exc & cept for & 4,000 & which is a & ccrued. & & \\ \hline & & Function & & Salaries & Other & & & \\ \hline & & Counselin & & 3,000 & 500 & & & \\ \hline & & Education & & 2,000 & & & & \\ \hline & & Administr & ation & 900 & & & & \\ \hline & & Fund-rais & sing & 500 & 200 & & & \\ \hline & & & Total & 6.400 & 700 & & & \\ \hline 10)- & Before pre & eparing fir & nancial sta & tements, Kez & zar ascerta & ins that the investmen & its held in & its \\ \hline & endowment & it fund hav & ve a fair va & lue of & 102,000 & & & \\ \hline 11)- & Kezar's tru & ustees dec & Eide that Ke & zar Cares sh & hould cons & truct a building rathe & than con & tinue to \\ \hline & rent space & e. Kezar a & Pproaches & several phila & anthropists & to raise funds. Sara & Dawn say & she will \\ \hline & contribute & up to & 50,000 & to match ot & ther contrit & butions as received, d & tollar for & dollar. \\ \hline & Oscar Catt & it says he & vill contrib & ute & 25,000 & provided Kezar raise & es a total o & \\ \hline & 100,000 & fromallo & ther donor & s. As a resul & It of its fur & nd-raising program, K & ezar raise & \\ \hline & 12.000 & from othe & er donors. k & Kezar then se & ends a lett & er to Ms. Dawn, advisi & ing her of & the \\ \hline & receipt of & the & 12,000 & & & & & \\ \hline 12)- & Kezar rece & eives a gif & tof & 5,000 & in cash. Tr & he donor stipulates th & at the gif & may be \\ \hline & used for ar & any activiti & ies the trus & tees direct, & except the & at it must be used to f & inance 20 & 14 activitie \\ \hline \end{tabular} Kezar Cares, a VHWO that offers counseling services to abused persons of all ages, is formed at the beginning of 2013. It receives contributions from various sources and performs counseling services under a government contract. Kezar classifies expenses by object of account (salaries and other) within four major functions-counseling program, education program, administration, and fund-raising. Kezar uses fund accounting because it believes fund accounting is useful for internal accounting purposes. It prepares financial statements, however, in accordance with generally accepted accounting principles. Kezar uses a UCF, an RCF, an EF, and a PF, Donor gifts with time or purpose restrictions are recorded in the RCF, Resources received and expenses incurred under the government contract are also recorded in the RCF, even though the net assets are not donor restricted, because Kezar believes it will improve controls over contract costs. To simplify its accounting. Kezar accounts for its capital assets in the UCF and uses the PF to account only for financial resources that will be used to acquire capital assets. Kezar has the following transactions in 2013. For each transaction, the fund in which the transaction is recorded is shown in bold type to the left of the journal entry, and the net asset classification, where applicable, is shown in bold type within the journal entry. \begin{tabular}{|c|c|c|c|c|c|c|c|c|} \hline \multirow[t]{3}{*}{ 1)- } & \multicolumn{8}{|c|}{ At the beginning of the year, Kezar receives unrestricted promises of cash donations in the } \\ \hline & amount of & 130,000 & \multicolumn{3}{|c|}{ Kezar expects to collect } & 100,000 of that am & \multicolumn{2}{|c|}{ of that amount in 2013 and } \\ \hline & \multicolumn{2}{|c|}{ estimates that } & 30,000 & \multicolumn{5}{|c|}{ will notbe collected. } \\ \hline \multirow[t]{3}{*}{ 2)- } & \multicolumn{2}{|c|}{ Kezar collects } & 118,000 & \multicolumn{5}{|c|}{ of the unrestricted promises to donate cash and writes off } \\ \hline & 12,000 & \multicolumn{4}{|c|}{ as uncollectible. It reverses the remaining } & \multicolumn{3}{|c|}{ allowance for uncollectible } \\ \hline & \multicolumn{8}{|c|}{ receivables. (Notice that the effect of the reversal is to increase unrestricted support.) } \\ \hline \multirow[t]{6}{*}{ 3)- } & \multicolumn{8}{|c|}{ Kezar receives two donations that contain restrictions imposed by the donors: } \\ \hline & \multirow{2}{*}{ a)- } & \multicolumn{3}{|c|}{ cash in the amount of 20,000} & \multicolumn{4}{|c|}{ that can be used only for research into counseling } \\ \hline & & \multicolumn{7}{|c|}{ methodology and } \\ \hline & b)- & \multicolumn{4}{|c|}{ investments that have a fair value of } & 100,000 The donor & making th & le second \\ \hline & & contributi & ion stipulat & res that the in & investment & corpus should be mair & ntained in & perpetuity. \\ \hline & & but the in & vestment in & come may be & used for & any purpose the Kezc & ar trustees & designate. \\ \hline 4)- & Kezar rece & eives the f & ollowing d & onated servi & ices: & & & \\ \hline & a)- & A psychol & logist donat & tes & 20 & hours of her time to & Kezar's co & unseling \\ \hline & & program. & Kezar woul & d have paid & 4,000 & for these services if & they had & notbeen \\ \hline & & donated. & & & & & & \\ \hline & b)- & A lawyer & donates & 10 & hours of h & his time to review a co & ontract Ke & zar is \\ \hline & & negotiatin & in with a go & overnment. H & He would no & ormally charge Kezar & 2,000 & for the \\ \hline & & services. & & & & & & \\ \hline 5)- & Kezar hold & ds a book s & sale as par & to of its fund & -raising pr & ogram. It raises & 12,000 & in cash \\ \hline & but pays & 2,000 & of that an & nount for var & rious exper & nses. Several high sch & ool studer & its donate \\ \hline & 16 & hours of & their time, & selling refre & eshments ar & nd books at the event. & Kezar wo & uld have \\ \hline & paid them & 5 & an hour fc & or these serv & vices had + & hey not been donated & & \\ \hline 6)- & Kezar pays & s salaries & & 14,000 & and other & expenses of & 2,000 & in \\ \hline & performing & 9 research & into couns & seling methoc & dology, usi & ing the restricted gift & in transa & ction 3. \\ \hline 7)- & Income of & 4,000 & is earned & and receivec & d on the in & ivestments in the endo & wment fur & \\ \hline 8)- & Kezar's con & ontract wit & th a governt & mentagency & for counse & eling services provide & is for quar & terly \\ \hline & advance pa & ayments. A & At the end o & of each quar & ter, Kezar & is required to submit & a stateme & nt of actual \\ \hline & costs incur & Irred. Base & d on the st & atement, Kez & zar is entit & Hed to receive the dif & ference b & etween \\ \hline & the advanc & ce and its & actual cost & rs. In accord & dance with & these arrangements, K & Kezar rece & ives an \\ \hline & advance pa & ayment of & 27.000 & on October & 1 and incu & urs actual costs of & 30,000 & \\ \hline & C & 26,000 & salari & ies and & 4,000 & other cost) & between & October 1 \\ \hline & and Decem & nber 31,2 & 013. & & & & & \\ \hline 9)- & Kezar incu & urs the fol & lowing exp & enses in und & dertaking it & is unrestricted progra & ams. All the & expenses \\ \hline & are paid in & n cash, exc & cept for & 4,000 & which is a & ccrued. & & \\ \hline & & Function & & Salaries & Other & & & \\ \hline & & Counselin & & 3,000 & 500 & & & \\ \hline & & Education & & 2,000 & & & & \\ \hline & & Administr & ation & 900 & & & & \\ \hline & & Fund-rais & sing & 500 & 200 & & & \\ \hline & & & Total & 6.400 & 700 & & & \\ \hline 10)- & Before pre & eparing fir & nancial sta & tements, Kez & zar ascerta & ins that the investmen & its held in & its \\ \hline & endowment & it fund hav & ve a fair va & lue of & 102,000 & & & \\ \hline 11)- & Kezar's tru & ustees dec & Eide that Ke & zar Cares sh & hould cons & truct a building rathe & than con & tinue to \\ \hline & rent space & e. Kezar a & Pproaches & several phila & anthropists & to raise funds. Sara & Dawn say & she will \\ \hline & contribute & up to & 50,000 & to match ot & ther contrit & butions as received, d & tollar for & dollar. \\ \hline & Oscar Catt & it says he & vill contrib & ute & 25,000 & provided Kezar raise & es a total o & \\ \hline & 100,000 & fromallo & ther donor & s. As a resul & It of its fur & nd-raising program, K & ezar raise & \\ \hline & 12.000 & from othe & er donors. k & Kezar then se & ends a lett & er to Ms. Dawn, advisi & ing her of & the \\ \hline & receipt of & the & 12,000 & & & & & \\ \hline 12)- & Kezar rece & eives a gif & tof & 5,000 & in cash. Tr & he donor stipulates th & at the gif & may be \\ \hline & used for ar & any activiti & ies the trus & tees direct, & except the & at it must be used to f & inance 20 & 14 activitie \\ \hline \end{tabular}