Problems 14-10. Lafayette Film Center (LFC) is a not-for- profit theater that plays independent films. In addition to revenue from theater admis- sions, LFC relies on concession and caf sales, grants and other external support, theater rental sales, and proceeds from special events and other programs that not only promote appreciation for inde- pendent films, but also generate grants and contributions. LFC's new executive director has asked you, as the director of finance, to provide analysis of the orga- an nization's financial position. Refer to Exhibits 14-7 through 14-10, which present LFC's statements of financial posi- tion, statements of activities, statements of functional expenses, and statements of cash flows for the years ended December 31, 2018 and 2017. 1. Does LFC have an endowment? How do you know? 2. How much of LFC's temporarily restricted net assets were reclassified as unrestricted in 2018? Where can this be found in the statements of financial position and statements of activities? 3. Calculate the four profitability ratios presented in the chapter for LFC for 2018 and 2017 as well as the percent change in each from 2017 to 2018. By which measure did LFC's profitability deteriorate the most, and by how much? CHAPTER Tancial Stalement Asalysie 553 4-7 Lafayette Fm Center Statements of Financial Position as of December 31, 2018 and 2017 rvices ratio Assets the percent to 2018. Is o for 2018 Cument Assets Cash and cash equivalents 2018 2017 Grants receivable accepted 75582 se2.096 Inventory 174.662 ons 4 and that LFC ing from ising in Other receivables 137.858. 50400 59.508 Prepaid expenses 36.172 37,624 Total Current Assets 11.552 $ 736402 409 652 expense inancial nation? much Long-Term Assets Conditional promises to give $ 284514. Deposits 488.530 1,510 Property and equipment, net 7,910 s than 9.336.672 9.278.616 or has wables etion Total Long-Term Assets $ 9.602.696 $ 9.775,056 Total Assets $10.339.098 $10,184,708 you Liabilities and Net Assets Current Liabilities over iod Accounts payable 108.214 113,240 111,776 109.044 or Accrued expenses 31,186 Deferred revenue at- 100,000 960,510 Line of credit ic 48,394 51,100 Current portion of capital lease obligations f- $ 373,410 $1.260,054 Total Current Liabilities 88.638 Long-Term Liabilities 36,596 Capital lease obligations less current portion 462.048 $ 1,296.650 Total Liabilities $ 9.184,130 $ 8,777,934 Net assets 538,530 264.514 Unrestricted $ 9,722.660 $ 9,042.448 Temporarily Restricted $10,184,708 Total Net Assets $10,339,098 Total Liabilities and Net Assets The accompanying notes are an integral part of these statements. Financial Analysis PART V EXHIBIT 14-8 Lafayette Film Center Statements of Activities for the Years Ended December 31, 2018 and 2017 Unrestricted 2017 2018 Revenue and Support S 78.640 S 414,818 Theater admissions 196.288 1,522,426 Concession and caf sales 61,350 139,684 Memberships 58,414 68,180 Theater rental sales 140,616 47,710 Special events 45,726 62,006 Other programs 56.656 Interest and investment income 1,384,002 Sale of tax credits 3,016,550 Grants 1,061,762 Contributions 360,104 1,129,112 Total Revenue and Support $3,676,690 $6,167,354 Net assets released from restrictions 274,016 1,826,578 Total Revenue and Other Support $3,950,706 $7,993,932 Expenses Program services $3,640,634 $1,378,472 General administration 455,436 407,244 Fund raising 260,832 302,384 Total Expenses $4,356,902 $2,088,100 Change in Net Assets $ (406,196) $5,905,832 Net assets-beginning of year 9,184,130 3,278,298 Net assets-end of year $8.777.934 $9,184,130 The accompanying notes are an integral part of these statements. Letayette Fam Center Stetements of Functional Expenses for the Years Ended December 31, 2018 and 2017 TOTAL Fundraising General Administration Program Services 2017 2017 2018 2018 2017 2017 2018 2018 Experises Selaries and wages 87510 S 73.02 S 45,474 S 1.676.740 s 644,806 197,140 $215.506 S 1388.176 37,606 72.264 s9.806 3.148 9.290 15.428 22.178 Employee benefts 176.786 96 586 7880 4.948 146 382 22.724 21.448 Payoll taxes Contracted lbor and 70,190 202.380 98.868 152.510 42.980 94,430 64640 38.872 15,100 services 90.942 2,220 44,420 09.940 11.828 3,192 insurance 30.372 17810 35.402 23.272 362 109,044 108.682 12,130 Equipment and maintenance 26.658 29.586 4,096 2858 45,832 131.590 100.236 78.276 Supplies 6.550 40 35,954 29.886 48.020 23,426 5.546 12.488 17.790 Printing materias T496 Meeting and trave 19.840 2.120 8.642 20.404 10.788 19.538 19,442 78,852 59.410 17.290 28,454 104.958 11.154 interest 37.900 Special events Cost of goods sold Ocoupancy 104.958 37.900 793,120 137.540 137540 793,120 68.636 25.350 20.664 168994 135,196 8,448 4.702 94.022 1.528 532 620 2.304 792 5,692 8.012 Membership dues 3.456 22.150 1,818 Computer expenses 8,128 1,546 196 23.968 9.870 Postage and handling 7.366 1,784) 17,956 4,050 824 3.584 26,146 2,896 9.418 Uniforms 2,8M 2.322 2860 2.608 900 Licenses and permits 2.536 4,540 1,634 39,942 2.808 272 5,440 Subscriptions 492 148 424 140 210 712 2,336 Marketing 91,016 39.942 91.016 Programming 73.046 33.340 33.340 73.046 Depreciation 570.280 42.390 94,310 11,642 11,606 624,356 1,948 107,900 Oher Total Expenses 2.584 4.468 520 3.104 4.468 $3.640 634 $1.378,472 $455,436 $407 244 $260,832 $302 384 $4.356.902 $2,088,100 wtes are an integral part of these statements s50 R12 05235 nets deont atio mdah n hand th ostion and serfoenance Why? t , make nedemce to ach ratio you Finial Asalyi PART Y 556 E T 14-10 Lafayette Fm Center Statements of Cash Flows for the Years Ended December 31, 2018 and 2017 2018 2017 $ 4,129.254 $680,212) Operating Activities Change in net assets Adjustments to reconcile change in net assets to 107.900 624,356 net cash provided byned in) operating activities 1,843.396 Depreciation Contnibutions restricted for bulding renovations 292.666 (424,838) dnoreasedecrease in operating assets (33,344) Grants receivable 1,452 Other receivables (16,818) 224,016 Conditional promises to give (11,552) Prapaid expenses 9.108 (59,510) Inventory 6,400 (1,510 Deposits Increase/idecrease) in operating labilities (5,026) (423,404) Accounts payable (2,732) 111,776 Accrued expenses 31.186 Defered revenue $227,842) $ 5,950.406 Net cash provided byused in) operating activities Investing Activities Payments for property and equipments $1682,412) $(7.159,362) Net cashvused in) investing activities $1682 412) $(7.159,362) Financing Activities Payments on capital leases $ (49,336) Net increase in line of credit $(10,084) Net cash provided by financing activities 860,510 100,000 $ 811.174 $89,916 Net increasedecreasej in cash and cash equivalents Cash and cash equivalents-beginning of year $ (99,080) $(1,119,040) Cash and cash equivalents-end of year 174,662 1,293,702 The accompanying notes are an integral part of these statements. $ 75.582 174,662