Preparation of not-for-profit journal entries and financial statements

Music and Math Camp, Inc. is a not-for-profit organization dedicated to the development of music skills in kids through weekend and summer camp experiences. Research shows that learning to read music and play an instrument helps the brain work with the body leading to stronger memory and math skills.

The organization reported the following post-closing trial balance at the end of last year:

Beginning Balances:	DR	CR
Cash	$234,000
Investments	3,120,000
Contributions receivable	676,000
Property, plant and equipment, net	1,560,000
Payables		$520,000
Long-term liabilities		1,040,000
Net assetswithout donor restrictions		2,080,000
Net assetswith donor restrictions		1,950,000
	$5,590,000	$5,590,000

The organization reported a cash investment return of 4% during the subsequent year, and the investments are allocated as follows:

InvestmentWithout Donor Restrictions =	20%
InvestmentWith Donor Restrictions =	80%

In addition to the recognition of investment returns, the organization reported the following revenues and expenses, all on account:

Supportcontributions (without donor restrictions)	$3,640,000
Supportcontributions (with donor restrictions)	422,500
Expensesprogram	3,380,000
Expensessupport	481,000

Of the total expenses, $260,000 relate to uses that are paid from net assets with donor restrictions in accordance with the stipulations of the donors and are, therefore, released from restriction.

During the year, the organization collected $3,900,000 of receivables and paid $3,770,000 of accounts payable. In addition, it purchased long-term assets for cash in the amount of $169,000 and recognized depreciation expense of $117,000 (of which 88% relates to program expenses and 12% relates to support expenses). The organization also purchased additional investments with excess cash in the amount of $156,000 and repaid $149,500 principal amount of long-term debt.

a. Prepare journal entries for the organizations financial activities during the year.

b. Prepare the year-end statement of activities and statement of financial position.

Note: Use a negative sign with your answer to indicate a decrease in net assets or release of net assets from restriction.

Please help with incorrect answers.

General Journal Description Debit Credit Cash 12,480,000 X 4,062,500 0 3,640,000 422,500 2,496,000 X 9.984,000 X 260,000 0 260,000 3,380,000 0 481,000 3,861,000 3,900,000 3,900,000 Contributions receivable Support-contributions (without donor restrictions) Support-contributions (with donor restrictions) Revenues-investment (without donor restrictions) Revenues-investment (with donor restrictions) To record recognition of support and revenues. Net assets released from restrictions with donor restrictions Net assets released from restrictions without donor restriction: To release net assets from restrictions. Expenses-program Expenses-support Payables To record recognition of expenses. Cash Contributions receivable To record collection of receivables. Payables Cash To record payment on account payables. Property, plant and equipment, net Expenses-program Expenses-support Cash To record purchase of long-term assets and recognize depreciation. Investments Cash To record purchase of investments. Long-term debt Cash To record payment on debt. 3,770,000 0 . > 3,770,000 52,000 102,960 14,040 169,000 > 156,000 > 156,000 149,500 149,500 Total 4,062.500 12,480,000 x 0 16,542,500 X 3,482,960 495,040 3.978,000 12,564,500 x 4,030,000 16,594,500 X Statement of Activities Without With Donor Restrictions Donor Restrictions Support-contributions $ 3.640,000 $ 422,500 $ Revenues-investment 2,496,000 X 9,984,000 X Net assets released from restrictions 260,000 (260,000) Total support and revenue 6,396,000 X 10.146.500 X Expenses-program 3,482,960 Expenses-support 495,040 0 Total expenses 3.978,000 Change in net assets 2,418,000 X 10,146,500 x Net assets beginning of year 2,080,000 1,950,000 Net assets end of year $ 4,498,000 x $ 12,096,500 x $ Statement of Financial Position Cash $ 12.396,500 X Investments 3,276,000 Contributions receivable 838,500 Total current assets 16,484,000 X Property plant and equipment net 1,612,000 Total assets $ 18,096,000 x Payables $ 611,000 Total current liabilities 611,000 Long-term Liabilities 890.500 Total liabilities 1.501,500 Net assets-without donor restrictions 4,498,000 X Net assets-with donor restrictions 12,096,500 X Total net assets 16,594,500 X Total liabilities and net assets $ 18,096,000 x General Journal Description Debit Credit Cash 12,480,000 X 4,062,500 0 3,640,000 422,500 2,496,000 X 9.984,000 X 260,000 0 260,000 3,380,000 0 481,000 3,861,000 3,900,000 3,900,000 Contributions receivable Support-contributions (without donor restrictions) Support-contributions (with donor restrictions) Revenues-investment (without donor restrictions) Revenues-investment (with donor restrictions) To record recognition of support and revenues. Net assets released from restrictions with donor restrictions Net assets released from restrictions without donor restriction: To release net assets from restrictions. Expenses-program Expenses-support Payables To record recognition of expenses. Cash Contributions receivable To record collection of receivables. Payables Cash To record payment on account payables. Property, plant and equipment, net Expenses-program Expenses-support Cash To record purchase of long-term assets and recognize depreciation. Investments Cash To record purchase of investments. Long-term debt Cash To record payment on debt. 3,770,000 0 . > 3,770,000 52,000 102,960 14,040 169,000 > 156,000 > 156,000 149,500 149,500 Total 4,062.500 12,480,000 x 0 16,542,500 X 3,482,960 495,040 3.978,000 12,564,500 x 4,030,000 16,594,500 X Statement of Activities Without With Donor Restrictions Donor Restrictions Support-contributions $ 3.640,000 $ 422,500 $ Revenues-investment 2,496,000 X 9,984,000 X Net assets released from restrictions 260,000 (260,000) Total support and revenue 6,396,000 X 10.146.500 X Expenses-program 3,482,960 Expenses-support 495,040 0 Total expenses 3.978,000 Change in net assets 2,418,000 X 10,146,500 x Net assets beginning of year 2,080,000 1,950,000 Net assets end of year $ 4,498,000 x $ 12,096,500 x $ Statement of Financial Position Cash $ 12.396,500 X Investments 3,276,000 Contributions receivable 838,500 Total current assets 16,484,000 X Property plant and equipment net 1,612,000 Total assets $ 18,096,000 x Payables $ 611,000 Total current liabilities 611,000 Long-term Liabilities 890.500 Total liabilities 1.501,500 Net assets-without donor restrictions 4,498,000 X Net assets-with donor restrictions 12,096,500 X Total net assets 16,594,500 X Total liabilities and net assets $ 18,096,000 x