Part 2: Presented below are two transactions involving not-for-profit entities who receive contributions intended for other not-for-profit entities. Analyze each transaction to determine its appropriate treatment. Prepare the journal entries as required.

b. A community wide fund raising appeal is conducted annually by a not-for-profit organization known as the Community Chest, Inc. The Community Chest receives donations from individuals during an annual fund raising appeal and distributes those funds to benefiting agencies (not financially interrelated) based on the allocations process of the Community Chest.

1) On January 15, 2021, Community Chest receives $500,000 of cash donations that it will ultimately distribute to various community groups such as Maggies Place, a food kitchen for the homeless, once its allocation committee convenes to determine how the funds will be distributed.

Prepare the journal entry to record the receipt of the donation on January 15 by Community Chest and Maggies Place, if applicable. (4 points)

Community Chest

DATE	ACCOUNT NAMES	DEBIT	CREDIT

Maggies Place

DATE	ACCOUNT NAMES	DEBIT	CREDIT

2) On February 15, 2021, the allocation committee of Community Chest meets and awards a grant of $35,000 to Maggies Place.

Prepare the journal entry to record the award on February 15 by Community Chest and Maggies Place, if applicable. (4 points)

Community Chest

DATE	ACCOUNT NAMES	DEBIT	CREDIT

Maggies Place

DATE	ACCOUNT NAMES	DEBIT	CREDIT