| The Art League is a not-for-profit organization dedicated to promoting the arts within the community. There are two programs conducted by the Art League: (1) exhibition and sales of members art (referred to as Exhibition) and (2) Community Art Education. Activities of the Art League are conducted by a part-time administrator, a part-time secretary-bookkeeper, and several part-time volunteers. The volunteers greet visitors, monitor the security of the exhibit hall, and handle the sales of art to the public. Art on exhibit is considered the property of the member artists, not the Art League. |
| The post-closing trial balance for the Art League as of June 30, 2016, is shown here. the image is included | Following is information summarizing the transactions of the Art League for the year ended June 30, 2017. | | 1. | During the year, unrestricted cash was received from the following sources: grants, $11,900, of which $4,750 had been reported as receivable on June 30, 2016; annual contributions from fund drives and other unrestricted gifts, $13,891; membership dues, $16,435; tuition and fees for educational workshops, $7,004; and sales of members art, $12,040, of which 10 percent represents commissions earned by the Art League. | | 2. | Interest earnings were as follows: interest on unrestricted investments totaled $689; interest on temporarily restricted investments totaled $928; interest on permanently restricted investments totaled $347 (these investment earnings are temporarily restricted for program use). | | 3. | Grants receivable as of year-end totaled $5,080, of which $3,150 was earned in the current year (thus unrestricted) and $1,930 was reported as deferred revenue. | | 4. | The Art League receives free rent from the city at an estimated value of $18,300 a year. | | 5. | Expenses incurred during the year were as follows: salaries and fringe benefits, $47,200; utilities $3,110; postage and supplies, $1,340; and miscellaneous, $670. As of year-end, the balances of the following accounts were: Prepaid Expenses, $870; Accounts Payable and Accrued Expenses, $2,791. | | 6. | During the year, $3,050 of short-term investments were sold, with the proceeds used to purchase two computers and printer at a cost of $2,865. The resources used were temporarily restricted for the purchase of equipment. | | 7. | In accordance with the terms of the Art League endowment, income earned by the endowment for the provision of free art instruction for handicapped children was provided at a cost of $855. This amount was allocated to community art education. | | 8. | Depreciation on equipment in the amount of $1,672 was recorded. | | 9. | Expenses for the year were allocated 30 percent to Exhibition Program, 20 percent to Community Art Education, 30 percent to Management and General Expenses, and 20 percent to Fund-Raising. | | 10. | Proceeds of art sales, net of commissions charged by the Art League, totaled $10,836. This amount was paid to member artists during the year. | | 11. | All nominal accounts were closed at year-end. | rev: 09_08_2016_QC_CS-60132 | b. | Prepare journal entries to record these transactions. Expense transactions should be initially recorded by object classification, unless otherwise instructed; in entry 9, expenses will be allocated to functions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) c. Prepare a statement of activities for year ended June 30, 2017. d.Prepare a statement of financial position for the year ended June 30, 2017. | | | | |
