Problem V: The Elder Citizens Agency is a voluntary health and welfare organization. The following events occur:

1. This year's fund drive resulted in unrestricted pledges totaling $130,000. Pledges of $25,000 were received for a special hot meal program.

2. Cash collected from pledges: unrestricted, $100,000; restricted, $18,000.

3. A philanthropist, who is an attorney, contributed a painting valued at $4,000, which is to be auctioned off at a Thanksgiving supper organized to raise funds for a legal assistance program for the elderly. The event was an unexpected success. The painting was sold for $7,800. Additional gross cash revenues were $4,900. Direct costs paid were $1,700.

4. The agency received $11,000 from the local division of United Way for general support.

5. Salaries amounted to $70,000, payroll taxes were $6,000, and other employee benefits amounted to $10,000. Of these items, $5,000 is unpaid.

6. Arrangements have been made to have a local catering firm bring in a hot lunch. Senior citizens are charged $0.75 per meal. To date, payments to the catering service are $2,300. Cash collections from the meal program service totaled $900.

7. It is estimated that 10% of the remaining unrestricted pledges and 5% of the remaining restricted pledges will prove uncollectible.

8. At the end of the previous year, $10,000 of the balance of the Unrestricted Net Assets had been designated for a special program for handicapped elderly persons. The program was to be conducted during the current year if sufficient support could be generated. The idea was abandoned this year for lack of interest. The governing board authorizes the reclassification of the amount as undesignated.

9. The Elder Citizens Agency had budgeted $500 per month to rent space to conduct its general activities. A generous citizen permits the agency to occupy equivalent space at a nominal fee of $100 per year. The annual fee is paid, and the appropriate expense for the year is recorded.

10. The Elder Citizens Agency allocates expenses in (e) 10%to the meal program, 30% to the legal assistance program, 40% tothe special handicap program, and 20% to general and administrative services.

Instructions Prepare journal entries to record the events.