The Burnaby School of Fine Arts (the School) had the following transactions and events in 2019 1 A supporter passed away in 2018 and in early 2019, the School received a memorial bequest in the form of an endowment contribution of $500,000 The will stated that the purchasing power of the endowment was to be maintained against inflation and any additional investment income was to be used to provide scholarships to the school During 2019, investment income from the endowment amounted to $25,000 Inflation was assessed to be at 2 $10,000 was paid out in scholarships from the investment income from the endowment 2 Early in the year, the School approached the local newspaper about placing some advertising to promote some of their programs The newspaper agreed to give the School a 50 discount on all advertising placed in the paper During 2019, the School paid $15,000 for advertising that year 3 A capital fund drive was started in mid 2019 with the goal of raising $5 million toward the cost of land and buildings for the School The Provincial Government has agreed to match all cash donations received By the end of 2019, $1 5 million had been received No matching money had yet been received from the Provincial Government Donations were invested in short term investments to earn investment income during the period prior to payment for construction In addition, one donor donated a suitable plot of land with a value of $1,000,000 Investment of the donation revenue earned investment income of $50,000 during 2019 Construction was scheduled to begin in mid 2020 4 In October 2019, the School organized a pledge drive to raise funds for their general operations for 2020 At the end of December 2019, $300,000 had been received in cash and credit card payments and another $200,000 of pledges was outstanding The Schools Board of Governors believes that 5 of the outstanding pledges will not be honoured Required a Provide journal entries for these transactions and events if the Burnaby School of Fine Arts does not use fund accounting but accounts for all donations using the deferred contribution method b Provide journal entries for these transactions and events if the Burnaby School of Fine Arts uses fund accounting and has an operating fund, a capital fund, a scholarship fund and an endowment fund Be sure to state the fund to which each entry will be posted

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Posted on Apr 27, 2023

The Burnaby School of Fine Arts (the School) had the following transactions and events in 2019: 1. A supporter passed away in 2018 and in

The Burnaby School of Fine Arts (the School) had the following transactions and events in 2019:

1. A supporter passed away in 2018 and in early 2019, the School received a memorial bequest in the form of an endowment contribution of $500,000. The will stated that the purchasing power of the endowment was to be maintained against inflation and any additional investment income was to be used to provide scholarships to the school. During 2019, investment income from the endowment amounted to $25,000. Inflation was assessed to be at 2%. $10,000 was paid out in scholarships from the investment income from the endowment.
2. Early in the year, the School approached the local newspaper about placing some advertising to promote some of their programs. The newspaper agreed to give the School a 50% discount on all advertising placed in the paper. During 2019, the School paid $15,000 for advertising that year.
3. A capital fund drive was started in mid-2019 with the goal of raising $5 million toward the cost of land and buildings for the School. The Provincial Government has agreed to match all cash donations received. By the end of 2019, $1.5 million had been received. No matching money had yet been received from the Provincial Government. Donations were invested in short term investments to earn investment income during the period prior to payment for construction. In addition, one donor donated a suitable plot of land with a value of $1,000,000. Investment of the donation revenue earned investment income of $50,000 during 2019. Construction was scheduled to begin in mid-2020.
4. In October 2019, the School organized a pledge drive to raise funds for their general operations for 2020. At the end of December 2019, $300,000 had been received in cash and credit card payments and another $200,000 of pledges was outstanding. The School’s Board of Governors believes that 5% of the outstanding pledges will not be honoured.

Required:

a. Provide journal entries for these transactions and events if the Burnaby School of Fine Arts does not use fund accounting but accounts for all donations using the deferred contribution method.
b. Provide journal entries for these transactions and events if the Burnaby School of Fine Arts uses fund accounting and has an operating fund, a capital fund, a scholarship fund and an endowment fund. Be sure to state the fund to which each entry will be posted.