Prepare only the journal entries required in (a) for transactions 1 10 and the Statement of Activities required in (b) of the exercise Journal entries should be numbered consistent with the transaction numbers in the exercise and should also be in good form (balanced, credits follow debits, description, etc ) and the Statement of Activities should use complete words rather than abbreviations or acronyms All amounts representing calculations should be shown broadly (do not simply put the formula for the amount in the cell) Use the functional allocation worksheet to allocate natural object expenses to the functions as noted in the exercise 1422 Recording and Reporting Transactions (LO14 3, LO14 5) INVOLVE was incorporated as a not for profit organization on January 1, 2020 During the fiscal year ended December 31, 2020, the following transactions occurred 1 A business donated rent free office space to the organization that would normally rent for $35,000 a year A fund drive raised $185,000 in cash and $100,000 in pledges that will be paid within one year A state government grant of $150,000 was received for program operating costs related to public health education Salaries and fringe benefits paid during the year amounted to $208,560 At year end, an additional $16,000 of salaries and fringe benefits were accrued A donor pledged $100,000 for construction of a new building, payable over five fiscal years, commencing in 2022 The discounted value of the pledge is expected to be $94,260 Office equipment was purchased for $12,000 The useful life of the equip ment is estimated to be five years Office furniture with a fair value of $9,600 was donated by a local office supply company The furniture has an estimated useful life of 10 years Furniture and equipment are considered net assets without donor restrictions by INVOLVE Telephone expense for the year was $5,200, printing and postage expense was $12,000 for the year, utilities for the year were $8,300, and supplies expense was $4,300 for the year At year end, an immaterial amount of supplies remained on hand and the balance in accounts payable was $3,600 Volunteers contributed $15,000 of time to help with answering the phones, mailing materials, and various other clerical activities It is estimated that 90 percent of the pledges made for the 2021 year will be collected Depreciation expense is recorded for the full year on the assets recorded in item 5 Chapter 14 Accounting for NotforProfit Organizations 609 All expenses were allocated to program services and support services in the following percentages public health education, 35 percent commu nity service, 30 percent management and general, 20 percent and fund raising, 15 percent Net assets were released to reflect satisfaction of state grant requirements that the grant resources be used for public health education program purposes All nominal accounts were closed to the appropriate net asset accounts Required Make all necessary journal entries to record these transactions Expense transactions should be initially recorded by object classification in entry 9, expenses will be allocated to functions Prepare a statement of activities for the year ended December 31, 2020 Prepare a statement of financial position for the year ended December 31, 2020 Prepare a statement of cash flows for the year ended December 31, 2020 Prepare a schedule of expenses by nature and function for the year ended December 31, 2020 Allocation of Functional Expenses (9) Fund Raising Public Health 35 Community Svc 30 M G 20 Total 100 15 Salaries 78,596 67,368 44,912 33,684 224,560 35 20 25 20 100 Other expenses Rent Phone Printing Utilities Supplies Depreciation Total Other Proof 12,250 1,820 4,200 2,905 1,505 1,176 23,856 7,000 1,040 2,400 1,660 860 672 13,632 8,750 1,300 3,000 2,075 1,075 840 17,040 7,000 1,040 2,400 1,660 860 672 13,632 35,000 5,200 12,000 8,300 4,300 3,360 68,160 Total Expenses 102,452 81,000 61,952 47,316 292,720

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Prepare only the journal entries required in (a) for transactions 1 - 10 and the Statement of Activities required in (b) of the exercise. Journal

Prepare only the journal entries required in (a) for transactions 1 - 10 and the Statement of Activities required in (b) of the exercise. Journal entries should be numbered consistent with the transaction numbers in the exercise and should also be in good form (balanced, credits follow debits, description, etc.) and the Statement of Activities should use complete words rather than abbreviations or acronyms. All amounts representing calculations should be shown broadly (do not simply put the formula for the amount in the cell). Use the functional allocation worksheet to allocate natural/object expenses to the functions as noted in the exercise. image text in transcribed

1422. Recording and Reporting Transactions. (LO14-3, LO14-5) INVOLVE was incorporated as a not-for-profit organization on January 1, 2020. During the fiscal year ended December 31, 2020, the following transactions occurred.

1. A business donated rent-free office space to the organization that would normally rent for $35,000 a year.

A fund drive raised $185,000 in cash and $100,000 in pledges that will be paid within one year. A state government grant of $150,000 was received for program operating costs related to public health education.
Salaries and fringe benefits paid during the year amounted to $208,560. At year-end, an additional $16,000 of salaries and fringe benefits were accrued.
A donor pledged $100,000 for construction of a new building, payable over five fiscal years, commencing in 2022. The discounted value of the pledge is expected to be $94,260.
Office equipment was purchased for $12,000. The useful life of the equip- ment is estimated to be five years. Office furniture with a fair value of $9,600 was donated by a local office supply company. The furniture has an estimated useful life of 10 years. Furniture and equipment are considered net assets without donor restrictions by INVOLVE.
Telephone expense for the year was $5,200, printing and postage expense was $12,000 for the year, utilities for the year were $8,300, and supplies expense was $4,300 for the year. At year-end, an immaterial amount of supplies remained on hand and the balance in accounts payable was $3,600.
Volunteers contributed $15,000 of time to help with answering the phones, mailing materials, and various other clerical activities.
It is estimated that 90 percent of the pledges made for the 2021 year will be collected. Depreciation expense is recorded for the full year on the assets recorded in item 5.

Chapter 14 Accounting for NotforProfit Organizations 609

All expenses were allocated to program services and support services in the following percentages: public health education, 35 percent; commu- nity service, 30 percent; management and general, 20 percent; and fund- raising, 15 percent.
Net assets were released to reflect satisfaction of state grant requirements that the grant resources be used for public health education program purposes.
All nominal accounts were closed to the appropriate net asset accounts.

Required

Make all necessary journal entries to record these transactions. Expense transactions should be initially recorded by object classification; in entry 9, expenses will be allocated to functions.
Prepare a statement of activities for the year ended December 31, 2020.
Prepare a statement of financial position for the year ended December 31,

2020.
Prepare a statement of cash flows for the year ended December 31, 2020.
Prepare a schedule of expenses by nature and function for the year ended

December 31, 2020.

Allocation of Functional Expenses-(9) Fund Raising Public Health 35% Community Svc 30% M&G 20% Total 100% 15% Salaries 78,596 67,368 44,912 33,684 224,560 35% 20% 25% 20% 100% Other expenses Rent Phone Printing Utilities Supplies Depreciation Total Other Proof 12,250 1,820 4,200 2,905 1,505 1,176 23,856 7,000 1,040 2,400 1,660 860 672 13,632 8,750 1,300 3,000 2,075 1,075 840 17,040 7,000 1,040 2,400 1,660 860 672 13,632 35,000 5,200 12,000 8,300 4,300 3,360 68,160 Total Expenses 102,452 81,000 61,952 47,316 292,720