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.
Question 1. Complete Transaction Worksheet

Transaction Worksheet ASSETS LIABILITIES Investments Date Cash 01/01 Beginning Balance 7,000 Pledges Receivable, net 500 Contract Receivables 1,000 0 Prepaid Expense 0 Equipment, net Note Payable Unrestricted 2,500 0 11,000 Revenues (& Support) and Expenses 01/04 Transaction 1 01/29 Transaction 2 02/19 Transaction 3 03/12 Transaction 4 04/07 Transaction 5-1 Transaction 5-2 05/25 Transaction 6 06/08 Transaction 07/21 Transaction 8 08/23 Transaction 9 10/23 Transaction 10 12/23 Transaction 11 12/25 Transaction 12-1 Transaction 12-2 12/31 Transaction 13 12/31 Transaction 14 12/31 Ending Balance NET ASSETS Temporarily Restricted 0 Revenues (& Support)