Question
Preparation of journal entries for a not-for-profit organization The Brewster Boosters is a not-for-profit organization that supports the Brewster White Caps baseball team in the
Preparation of journal entries for a not-for-profit organization
The Brewster Boosters is a not-for-profit organization that supports the Brewster White Caps baseball team in the summer Cape Cod League for college-aged baseball players. During the year, the organization recorded a number of financial activities. Prepare journal entries for each of the following activities:
a. The organization recognized the following support and revenues (the contributions are all on account and the investment returns are in cash):
Supportcontributions (without donor restrictions)$3,920,000Supportcontributions (with donor restrictions)455,000Revenuesinvestment (without donor restrictions)26,880Revenuesinvestment (with donor restrictions)107,520
General JournalDescriptionDebitCreditCashAnswer
Answer
Answer
Cash
Contributions receivable
Depreciation expense
Expenses-program
Investments
Net assets released from restrictionswith donor restrictions
Net assets released from restrictionswithout donor restrictions
Payables
Revenuesinvestment (with donor restrictions)
Answer
Answer
Supportcontributions (without donor restrictions)Answer
Answer
Supportcontributions (with donor restrictions)Answer
Answer
Revenuesinvestment (without donor restrictions)Answer
Answer
Answer
Cash
Contributions receivable
Depreciation expense
Expenses-program
Investments
Net assets released from restrictionswith donor restrictions
Net assets released from restrictionswithout donor restrictions
Payables
Revenuesinvestment (with donor restrictions)
Answer
Answer
b. Brewster Boosters recognized program expenses of $3,640,000 and expenses related to support activities of $518,000, both on account. Of the program expenses, $280,000 was paid from net assets with donor restrictions and used in compliance with the donor's stipulations.
DescriptionDebitCreditAnswer
Cash
Contributions receivable
Depreciation expense
Expenses-program
Investments
Net assets released from restrictionswith donor restrictions
Net assets released from restrictionswithout donor restrictions
Payables
Revenuesinvestment (with donor restrictions)
Answer
Answer
Answer
Cash
Contributions receivable
Depreciation expense
Expenses-program
Investments
Net assets released from restrictionswith donor restrictions
Net assets released from restrictionswithout donor restrictions
Payables
Revenuesinvestment (with donor restrictions)
Answer
Answer
To release net assets from restrictions.Answer
Cash
Contributions receivable
Depreciation expense
Expenses-program
Investments
Net assets released from restrictionswith donor restrictions
Net assets released from restrictionswithout donor restrictions
Payables
Revenuesinvestment (with donor restrictions)
Answer
Answer
Expenses-supportAnswer
Answer
Answer
Cash
Contributions receivable
Depreciation expense
Expenses-program
Investments
Net assets released from restrictionswith donor restrictions
Net assets released from restrictionswithout donor restrictions
Payables
Revenuesinvestment (with donor restrictions)
Answer
Answer
To record recognition of expenses.
c. The organization acquired $182,000 of long-term assets during the year and recorded $126,000 of depreciation expense (record the net increase in long-term assets to the property, plant and equipment, net account). The depreciation expense will be allocated to program and support expense categories at the end of the year.
DescriptionDebitCreditProperty, plant and equipment, netAnswer
Answer
Answer
Cash
Contributions receivable
Depreciation expense
Expenses-program
Investments
Net assets released from restrictionswith donor restrictions
Net assets released from restrictionswithout donor restrictions
Payables
Revenuesinvestment (with donor restrictions)
Answer
Answer
Answer
Cash
Contributions receivable
Depreciation expense
Expenses-program
Investments
Net assets released from restrictionswith donor restrictions
Net assets released from restrictionswithout donor restrictions
Payables
Revenuesinvestment (with donor restrictions)
Answer
Answer
d. Brewster Boosters purchased $168,000 of investments during the year.
DescriptionDebitCreditAnswer
Cash
Contributions receivable
Depreciation expense
Expenses-program
Investments
Net assets released from restrictionswith donor restrictions
Net assets released from restrictionswithout donor restrictions
Payables
Revenuesinvestment (with donor restrictions)
Answer
Answer
Answer
Cash
Contributions receivable
Depreciation expense
Expenses-program
Investments
Net assets released from restrictionswith donor restrictions
Net assets released from restrictionswithout donor restrictions
Payables
Revenuesinvestment (with donor restrictions)
Answer
Answer
e. The organization collected $4,200,000 of contributions receivable and used the cash to pay $4,060,000 of accounts payable.
DescriptionDebitCreditAnswer
Cash
Contributions receivable
Depreciation expense
Expenses-program
Investments
Net assets released from restrictionswith donor restrictions
Net assets released from restrictionswithout donor restrictions
Payables
Revenuesinvestment (with donor restrictions)
Answer
Answer
Answer
Cash
Contributions receivable
Depreciation expense
Expenses-program
Investments
Net assets released from restrictionswith donor restrictions
Net assets released from restrictionswithout donor restrictions
Payables
Revenuesinvestment (with donor restrictions)
Answer
Answer
To record collection of cash.Answer
Cash
Contributions receivable
Depreciation expense
Expenses-program
Investments
Net assets released from restrictionswith donor restrictions
Net assets released from restrictionswithout donor restrictions
Payables
Revenuesinvestment (with donor restrictions)
Answer
Answer
Answer
Cash
Contributions receivable
Depreciation expense
Expenses-program
Investments
Net assets released from restrictionswith donor restrictions
Net assets released from restrictionswithout donor restrictions
Payables
Revenuesinvestment (with donor restrictions)
Answer
Answer
To record payment of payables.
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Financial & Managerial Accounting
Authors: Carl Warren
12th Edition
1285534646, 978-1133952428
