REQUIRED: Prepare the Closing Entries necessary to close out the Statement of Activities

NOTE: Each general ledger account from the Statement of Activities gets closed out to one of two accounts: Either a) Net Assets With Donor Restrictions OR b) Net Assets WITHOUT Donor Restrictions.

These are both balance sheet accounts.

Transaction 1: The DONOR gives you $2,000 cash to use for scholarships

Transaction 2: The DONOR given you $1,000 and you can use it for any programs

Transaction 3: The NFP pays out $2,000 for scholarship expenses

Journal Entry: DEBITS CREDITS

Cash $2,000

Contribution (Restricted by Donor) $2,000 (needs to be closed)

Cash $1,000

Contribution (Not Restricted) $1,000 (needs to be closed)

Net Assets Released-Donor Restriction $2,000 (needs to be closed)

Net Assets Released-Without Donor Restriction $2,000 (needs to be closed)

Expenses-Scholarships $2,000 (needs to be closed)

Cash $2,000

Statement of Activities (dollars are in CREDITS)

For the Year Ended 2019 CONTRIBUTIONS CONTRIBUTIONS

Unrestricted Restricted By Donor

Contributions (not restricted) $1,000

Contributions (restricted) $2,000

Net Assets Released-Donor Restrictions ($2,000)

Net Assets Released-Without Donor Restrictions $2,000

Expenses ($2,000)

CHANGE IN ACTIVITIES FOR THE YEAR: $1,000 -0- $1,000 total

Balance Sheet As of December 31, 2019

Cash $1,000

Net Assets without Donor Unrestricted $1,000