Question
Question 9 Recognition of Contributions The following events relate to Habitat for Humanity Internationals activities. If appropriate, assume a discount rate of 3 percent per
Question 9
Recognition of Contributions
The following events relate to Habitat for Humanity Internationals activities. If appropriate, assume a discount rate of 3 percent per annum. Expenditures for house building activities are categorized as program expense.
Required
In each case, identify (a) whether the item should be recorded as a contribution and (b) if recorded, prepare the journal entry or entries to record the event. If net assets are affected, indicate the category of net assets affected.
NOTE: Round answers to the nearest whole number, when appropriate.
1. In a telephone solicitation, a potential donor says he will contribute $500 in 30 days.
Recorded? | AnswerYesNo | Amount | Answer | Classification: | AnswerNet assets with donor restrictionsNet assets without donor restrictionsN/A |
2. In a telephone solicitation, a potential donor requests that a pledge card be mailed, suggesting that a $250 contribution may be forthcoming.
Recorded? | AnswerYesNo | Amount | Answer | Classification: | AnswerNet assets with donor restrictionsNet assets without donor restrictionsN/A |
3. A potential donor makes a documented promise to contribute $100,000 when Habitat for Humanity has raised $100,000 in matching funds; $40,000 in matching funds has been raised to date.
Recorded? | AnswerYesNo | Amount | Answer | Classification: | AnswerNet assets with donor restrictionsNet assets without donor restrictionsN/A |
4. Same as 3. except that the potential donor promises to contribute up to $100,000 by giving $1 for each $1 of matching funds raised.
Recorded? | AnswerYesNo | Amount | Answer | Classification: | AnswerNet assets with donor restrictionsNet assets without donor restrictionsN/A |
5. A group of college students helps build a house for Habitat for Humanity in inner city Los Angeles; Habitat for Humanity estimates the value of the groups services at $10,000.
Recorded? | AnswerYesNo | Amount | Answer | Classification: | AnswerNet assets with donor restrictionsNet assets without donor restrictionsN/A |
6. A donor contributes $15,000 in cash and signs an agreement to contribute $15,000 at the beginning of each of the next four years, to support specific Habitat for Humanity projects.
a. Contribution received now | Recorded? | AnswerYesNo | Amount | Answer | Classification: | AnswerNet assets with donor restrictionsNet assets without donor restrictionsN/A | ||
b. Contributions received the next four years | Recorded? | AnswerYesNo | Amount | Answer | Classification: | AnswerNet assets with donor restrictionsNet assets without donor restrictionsN/A |
7. A donor contributes $200,000, stating that half is to be used to restore and build houses in upstate New York this year, and half is to be used for the same purpose next year.
(HINT: Complete answers considering the initial contribution only.)
Recorded? | AnswerYesNo | Amount | Answer | Classification: | AnswerNet assets with donor restrictionsNet assets without donor restrictionsN/A |
8. At the beginning of the year, a donor contributes a building worth $4,000,000 and requires that it be used to house Habitat for Humanitys administrative offices over the buildings 20-year remaining estimated useful life. Depreciation for the year is recorded as administrative expense.
(HINT: Complete answers considering the initial contribution only.)
Recorded? | AnswerYesNo | Amount | Answer | Classification: | AnswerNet assets with donor restrictionsNet assets without donor restrictionsN/A |
9. A registered plumber volunteers her services to install plumbing in several Habitat for Humanity houses. The plumbers services are valued at $5,000.
Recorded? | AnswerYesNo | Amount | Answer | Classification: | AnswerNet assets with donor restrictionsNet assets without donor restrictionsN/A |
10. A donor contributes $1,000,000 face value of 4 percent bonds as an endowment to Habitat for Humanity. Income generated from the bonds is to be used to buy appliances for new houses. Donated between interest payment dates, the bonds $1,060,000 value includes accrued interest of $25,000.
a. Fair value of bonds | Recorded? | AnswerYesNo | Amount | Answer | Classification: | AnswerNet assets with donor restrictionsNet assets without donor restrictionsN/A | ||
b. Accrued interest on bonds | Recorded? | AnswerYesNo | Amount | Answer | Classification: | AnswerNet assets with donor restrictionsNet assets without donor restrictionsN/A |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started