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

Youth Camps, Inc. is a not-for-profit organization that owns a number of summer camps for inner-city children. At the end of last year, the organization reported the following trial balance:

	DR	CR
Cash	$399,600
Investments	5,328,000
Contributions receivable	1,154,400
Property, plant and equipment, net	2,664,000
Payables		$888,000
Long-term liabilities		1,776,000
Net assetswithout donor restrictions		3,552,000
Net assetswith donor restrictions		3,330,000
	$9,546,000	$9,546,000

The investments are allocated as follows: 40% are unrestricted, 60% are donor restricted. Investment income (paid in cash) is 5% for the current year.

During the year, the organization received $6,216,000 in donations without donor restrictions and $621,600 in donations with donor restrictions. All of these donations are on account. In addition, it recognized program expenses of $5,772,000 and expenses relating to support of $821,400, both on account. Of the program expenses, $444,000 is spent using net assets with donor restrictions for approved purposes, thus receiving the appropriate release from the donors restrictions.

Youth Camps collected $6,660,000 of contributions receivable, paid $6,438,000 of payables, and purchased additional land in the amount of $288,600 (depreciation expense of $199,800 allocated 90% to program expenses and 10% to support expenses). Interest expense on the long-term debt is included in the expenses referenced above, and no repayment of the principal is recognized during the year.

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

General Journal
Description	Debit	Credit
Cash	Answer	Answer
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictionswith donor restrictionsNet assets released from restrictionswithout donor restrictionsPayablesProperty, plant and equipment, netRevenuesinvestment (with donor restrictions)	Answer	Answer
Supportcontributions (without donor restrictions)	Answer	Answer
Supportcontributions (with donor restrictions)	Answer	Answer
Revenuesinvestment (without donor restrictions)	Answer	Answer
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictionswith donor restrictionsNet assets released from restrictionswithout donor restrictionsPayablesProperty, plant and equipment, netRevenuesinvestment (with donor restrictions)	Answer	Answer
To record recognition of support and revenues.
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictionswith donor restrictionsNet assets released from restrictionswithout donor restrictionsPayablesProperty, plant and equipment, netRevenuesinvestment (with donor restrictions)	Answer	Answer
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictionswith donor restrictionsNet assets released from restrictionswithout donor restrictionsPayablesProperty, plant and equipment, netRevenuesinvestment (with donor restrictions)	Answer	Answer
To release net assets from restrictions.
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictionswith donor restrictionsNet assets released from restrictionswithout donor restrictionsPayablesProperty, plant and equipment, netRevenuesinvestment (with donor restrictions)	Answer	Answer
Expenses-support	Answer	Answer
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictionswith donor restrictionsNet assets released from restrictionswithout donor restrictionsPayablesProperty, plant and equipment, netRevenuesinvestment (with donor restrictions)	Answer	Answer
To record recognition of expenses.
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictionswith donor restrictionsNet assets released from restrictionswithout donor restrictionsPayablesProperty, plant and equipment, netRevenuesinvestment (with donor restrictions)	Answer	Answer
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictionswith donor restrictionsNet assets released from restrictionswithout donor restrictionsPayablesProperty, plant and equipment, netRevenuesinvestment (with donor restrictions)	Answer	Answer
To record collection of receivables.
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictionswith donor restrictionsNet assets released from restrictionswithout donor restrictionsPayablesProperty, plant and equipment, netRevenuesinvestment (with donor restrictions)	Answer	Answer
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictionswith donor restrictionsNet assets released from restrictionswithout donor restrictionsPayablesProperty, plant and equipment, netRevenuesinvestment (with donor restrictions)	Answer	Answer
To record payment on account payables.
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictionswith donor restrictionsNet assets released from restrictionswithout donor restrictionsPayablesProperty, plant and equipment, netRevenuesinvestment (with donor restrictions)	Answer	Answer
Expenses-program	Answer	Answer
Expenses-support	Answer	Answer
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictionswith donor restrictionsNet assets released from restrictionswithout donor restrictionsPayablesProperty, plant and equipment, netRevenuesinvestment (with donor restrictions)	Answer	Answer
To record purchase of long-term assets and recognize depreciation.

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.

Statement of Activities
	Without Donor Restrictions	With Donor Restrictions	Total
Supportcontributions	Answer	Answer	Answer
Revenuesinvestment	Answer	Answer	Answer
Net assets released from restrictions	Answer	Answer	Answer
Total support and revenue	Answer	Answer	Answer
Expensesprogram	Answer	Answer	Answer
Expensessupport	Answer	Answer	Answer
Total expenses	Answer	Answer	Answer
Change in net assets	Answer	Answer	Answer
Net assets beginning of year	Answer	Answer	Answer
Net assets end of year	Answer	Answer	Answer

Statement of Financial Position
Cash	Answer
Investments	Answer
Contributions receivable	Answer
Total current assets	Answer
Property plant and equipment, net	Answer
Total assets	Answer
Payables	Answer
Total current liabilities	Answer
Long-term liabilities	Answer
Total liabilities	Answer
Net assetswithout donor restrictions	Answer
Net assetswith donor restrictions	Answer
Total net assets	Answer
Total liabilities and net assets	Answer