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Required: a. Prepare a statement of activities for the Watson Foundation for this year. b. Prepare a statement of financial position for the Watson Foundation at the end of this year. The Watson Foundation, a private not-forprofit entity, starts 2020 with cash of $100,000, contributions receivable (net) of $200,000, investments of $300,000, and land, buildings, and equipment (net) of $200,000. Net assets without donor restrictions were reported as $400,000, the same figure as the net assets with donor restrictions. Of the restricted net assets, $300,000 was purpose restricted whereas the other $100,000 had to be held permanently, although the subsequently earned income is without restriction. Fifty percent of the purpose restricted net assets had to be used to help pay for a new building. The remainder was restricted to the payment of officer salaries. Donors made no stipulations about the eventual reporting of buildings and other long-lived assets when acquired. Watson has one program service (health care) and two supporting services (fundraising and administrative).During the current year, Watson Foundation has the following transactions. 9" PPM\"? :49: 10. 11. 12. 13. 14. 15. Computed interest of $20,000 on the unrestricted contribution receivable. Received cash of $100,000 from the contributions receivable and wrote off another $4,000 as uncollectible. Received unrestricted cash donations of $180,000. Received $23,000 in cash that must be spent for a particular type of office machine within the next year or the money must be returned. Paid salaries of $90,000. Of that amount, $27,000 came from restricted funds. The payment was made to individuals doing health care work. Spent the $23,000 in (4) for the appropriate office machine. Received a cash gift of $12,000 that Watson must convey to another specied charity. However, Watson has the right to give this money to a different organization If ofclals so choose. Bought a building for $500,000 by signing a long-term note for $450,000 and using restricted funds for the remainder. Collected annual membership dues of $30,000. Individuals receive substantial benets from their memberships. By the end of the year, two-thirds of the time {or the average membership has passed. Received unrestricted Income of $52,000 generated by net assets that must be held permanently. The board of directors of the Watson Foundation vote to set aside $9,000 of Its Investments for emergency purposes. Pald rent of $12,000 for the past month, advertising of $15,000, and utilities of $16,000. These were half for the program service and one-fourth each for the two supporting services. Received an unrestricted pledge of $200,000. Watson will collect the money in ve years and does not expect any part to be uncollectible. Present value at inception is $149,000, but interest for the year to date is $6,000. Computed depreciation of $40,000, 60 percent for health care, 30 percent for administrative, and 10 percent for fundraising. Paid $15,000 In interest on the note signed in (8). All ofthis cost is assumed to be related to health care. H\" Required: a. Prepare a statement of activities for the Watson Foundation for this year. (Negative amounts should be indicated by a minus sign.) WATSON FOUNDATION STATEMENT OF ACTIVITIES For Year Ending December 31, 2020 Net Assets Net Assets Without Donor With Donor Restrictions Restrictions Contribution revenue: Donations Interest Total 0 0 0 Investment income Exchange revenues-memberships Total contributions and revenues $ o $ 0 $ 0 Net assets released from restrictions Total contributions, revenues, and net assets released from restrictions $ 0 $ 0 $ 0 Expenses: Program services-healthcare Salary Rent Advertising Utilities Depreciation Interest 0Supporting services-fundraising Rent Advertising Utilities Depreciation 0 Supporting services-administrative Rent Advertising Utilities Depreciation 0 Total expenses 0 Excess of total contributions, revenues, and net assets released from restriction over expenses Net assets at beginning of year Net assets at end of year $ 0 $ 0b. Prepare a statement of financial position for the Watson Foundation at the end of this year. by a minus sign.) WATSON FOUNDATION STATEMENT OF FINANCIAL POSITION December 31, 2020 Assets Cash Contributions receivable (net) Investments Investments-internally restricted Land, buildings, and equipment (net) Total assets Liabilities Deferred revenues Notes payable Total liabilities Net Assets Without donor restrictions: Unrestricted Board-designated for emergency purposes With donor restrictions Total net assets Total liabilities and net assets
