Suppose you are a financial manager in a nonprofit organization named For Youth Agency (FYA) is a voluntary organization that provides counseling and recreation programs for youthful offenders and delinquents. FYA's programs are financed through a contract with the county in which it is located and through contributions from local citizens. Its contract with the county provides for reimbursement of allowable costs based on monthly billings to the county. FYA uses the accrual basis of accounting, and the following transaction occurred during 2024:

Transaction 1. January 4: FYA received pledges of gifts in the amount of $21,000 to be used at the FYA board of trustees considers appropriate.

Transaction 2. January 29: FYA collected $1,000 cash on the pledges received in Transaction 1.

Transaction 3. February 12: FYA received a gift of Intel stock that had a fair market value of$1,200 total at the time of the gift. The donor sent FYA's president a letter with the gift, saying that proceeds of the stock should be used only to purchase athletic equipment for the basketball team.

Transaction 4. March 12: FYA sold half of Intel stock that had a fair market value of $600 total at the time.

Transaction 5. April 7: (1) The proceeds ($600) through transaction 4 are released from restriction. (2) Using the proceeds, FYA paid $600 cash for athletic equipment.

Transaction 6. May 25: FYA spent $700 cash for the Counseling program.

Transaction 7. June 8: FYA billed the county $5,500 for costs incurred under its contract.

Transaction 8. July 21: FYA borrowed $9,000 from a local bank on an unsecured note. The whole amount will be repaid within a year.

Transaction 9. August 23: FYA paid the local bank $4,000, of which $3,600 was principal and $400 was interest.

Transaction 10. October 23: FYA expects that it will not be able to collect $600 of pledges.

Transaction 11. December 23: FYA prepaid next year's rent of $12,000.

Transaction 12. December 25: A licensed social worker in the area donated 10 hours of her time to FYA. Her normal hourly rate is $20 per hour. The CEO appreciates the donation because otherwise, he would have to purchase the counseling service.

Transaction 13. December 31: FYA used the existing and purchased athletic equipment this year. FYA recorded $200 of depreciation for the year.

Transaction 14. December 31: The fair market value of the remaining half of Intel stock on December 31 is $700. According to the donor's letter with the gift (transaction 3), the capital gain of the stock also should be used only to purchase athletic equipment for the basketball team.