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The Far North Centre (the Centre) is an anti-poverty organization funded by contributions from governments and the general public. For a number of years, it

The Far North Centre (the Centre) is an anti-poverty organization funded by contributions from governments and the general public. For a number of years, it has been run by a small group of permanent employees with the help of part-timers and dedicated volunteers. It owns its premises, which are in the process of being renovated. The funds for this were obtained through a special capital fund campaign carried out last year. Its main program is the daily provision of meals to the needy. It also distributes clothing, most of which is donated. Operating funds come from government grants, interest earned from endowment investments, and a public campaign held in the latter part of each year to raise funds for the needs of the next fiscal year. The Centre maintains its records in accordance with the deferral method of accounting for contributions. Fund accounting is not used.

The organizations statement of financial position on January 1, Year 6, is shown below.

FAR NORTH CENTRE
STATEMENT OF FINANCIAL POSITION
January 1, Year 6
Current Assets
Cash $ 842,000
Pledges receivable 832,000
Allowance for uncollectible pledges (70,500 )
Grants receivable 475,000
2,078,500
Investments 430,000
Capital assets
Land and buildings 838,000
Furniture and equipment 507,000
Accumulated depreciation (684,000 )
661,000
$ 3,169,500
Current Liabilities
Accounts payable $ 503,600
Wages payable 142,000
Accrued liabilities 14,100
659,700
Deferred Revenue
Deferred contribution revenue 836,000
Deferred unspent contributions for capital assets 424,300
Deferred contributions related to capital assets 270,700
1,531,000
Net Assets
Net assets restricted for endowment purposes 473,000
Unrestricted net assets 505,800
978,800
$ 3,169,500

The following transactions took place in Year 6:

  1. $109,400 from endowment fund cash was invested in marketable securities.
  2. Office equipment costing $7,350 was purchased with operating fund cash.
  3. Invoices totalling $1,660,000 were received for goods and services. These invoices were recorded as accounts payable and were allocated 55% to food program, 20% to clothing program, and 25% to administration.
  4. The capital fund grants receivable of $119,000 were collected in full, and the $9,600 in accounts payable was paid. During Year 6, building renovations costing $315,000 and equipment purchases of $91,000 were made. Of this cost, 90% was paid, with the balance held back and still owing at year-end.
  5. Operating fund accounts payable amounting to $1,785,000 and the wages payable and accrued liabilities at the beginning of the year were all paid.
  6. All of the operating fund pledges receivable and grants receivable of $356,000.
  7. The deferred revenue from the Year 5 fundraising campaign was made up of the following:
Contributions for Year 6 activities $ 1,310,000
Less: Campaign expense 474,000
$ 836,000

The Centre runs the campaign with its own people and is fully responsible for all decisions made during the campaign.

  1. Government grants for operating purposes totalled $1,108,500, of which $1,018,000 was received during the year, with the balance expected early in Year 7.
  2. The total wage costs for the year amounted to $425,500, of which $309,000 was paid and $116,500 is payable at year-end. These costs are to be allocated 40% each to the food and clothing programs, with the balance to administration.
  3. The campaign to raise funds for next years operations was held in December. Cash of $504,000 was collected and pledges of $734,000 were received. It is expected that 5% of these pledges will be uncollectible. Total fundraising costs were $578,000, of which $120,500 is still owed to suppliers.
  4. An endowment contribution of $13,200 cash was received. In addition, the investments in the endowment fund earned $33,100 in interest.
  5. The annual depreciation on the buildings and equipment amounted to $138,500.

Other Information:

13. Seventy percent of the depreciable capital assets at the end of the year were purchased with restricted contributions.

Required:

(a) Prepare the journal entries necessary to reflect the Year 6 events. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

(b) Prepare a Year 6 statement of financial position, a statement of revenues and expenses, and a statement of changes in net assets for the year. (Input all amounts as positive values. Omit $ sign in your response.)

Far North Centre
Statement of financial position
December 31, Year 6
Current Assets
Cash $
Pledges receivable (net of uncollectible allowance)
Grants receivable
Investments
Capital assets
Land and buildings
Furniture and equipment
Accumulated depreciation
$
Current Liabilities
Accounts payable $
Wages payable
Deferred Revenue
Deferred contributions
Deferred unspent contributions for capital assets
Deferred contributions related to capital assets
Net Assets
Restricted for endowment
Unrestricted
$

Far North Centre
Statement of Revenues and Expenses
for the Year Ended December 31, Year 6
Revenues
Contributions $
Government grants
Interest earned
Amortization of deferred contributions
Expenses
Food program
Clothing program
Administration
Fundraising
Depreciation
Excess of expenses over revenue $

Far North Centre
Statement of Changes in Net Assets
for the Year Ended December 31, Year 6
Restricted for endowment Unrestricted Total
Balance January 1 $ $ $
Excess of expenses over revenues
Endowment contributions
Balance December 31 $ $ $

(c) Prepare closing entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

(d) What are fundraising costs as a percent of total revenues for Ye

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