Not-for-Profit Accounting Class Exercise

The Family Counseling Center was established on January 2, 2023 to provide a variety of counseling services to community residents, including marriage counseling, assistance to troubled teens, and treatment for drug and alcohol addiction. The following transactions occurred during 2023.

1. The Centers initial resources were provided by a $75,000 state grant. Of the total grant, $50,000 is to be used for the acquisition of a building and office equipment, $15,000 is to be used for a special program for abused children, and the remainder is not restricted.
2. A local United Way agency contributed $35,000 for general use (not restricted for a particular purpose).
3. A fundraising brochure was mailed to all town residents. Amounts paid for printing and postage costs were $5,200.
4. A building was acquired for $42,000 and $4,800 was spent buying office furniture and equipment.
5. Direct contributions from community residents were $8,000 in cash and $4,000 in the form of pledges. The Center estimates that 75% of the pledges are collectible. The board designated $3,000 of the contributions for the special program for abused children.
6. The salary of the Centers director is $30,000. She spent approximately 10% of her time on fundraising efforts, 50% on the administrative duties of the Center, and the remainder working directly with the various programs.
7. Salaries for part-time counselors, totaling $9,000, were paid.
8. Brochures, toys and other supplies for use in counseling sessions were purchased at a cost of $5,000 (charged on account amount not yet paid). Supplies used during the year were $3,000 and the remaining $2,000 are on hand at year end.
9. The special program for abused children was not started in 2023. All resources dedicated to this program ($18,000) were invested in marketable securities on October 31.
10. The building has an estimated useful life of 20 years; the furniture and equipment have average expected lives of 5 years. The Center uses straight-line depreciation and assumes a salvage value of $0. Assume the equipment is used 100% for programs. 80% of the building is available for program activities, administrative office occupy 15% of the building, and 5% of the building houses offices for fundraising activities.
11. The fair market value of marketable securities at December 31, 2023 was $22,000.

Required:

1. Prepare the journal entries to record the transactions for 2023.
2. Prepare a statement of activities, statement of functional expenses, and a statement of financial position at December 31, 2023.