The Harrisonburg Museum Association

The Harrisonburg Museum Association, a nonprofit organization, had the following transactions for the year ended December 31, 2014:

1. Cash contributions to the Association for the year included (a) unrestricted, $1,100,000; (b) restricted for traveling displays, $350,000; (c) restricted by the donor for endowment purposes, $1,400,000; and (d) restricted by the donor for equipment, $500,000.

2. Additional unrestricted cash receipts included (a) admission charges, $300,000; (b) interest income, $210,000; and (c) tuition for museum school, $50,000.

3. Donors made pledges in 2014 in a pledge drive specifically for funds to be used in 2015. The amount was $400,000.

4. A multiyear pledge (temporarily restricted) was made at the end of the year by a private foundation. The foundation pledged $50,000 per year for the next five years (at the end of each year). The present value (rounded) of those future payments is $211,000, using a 6 percent discount rate.

5. $195,000 in funds restricted for traveling museum displays was expended during 2014.

6. The Museum Association had $150,000 in pledges in 2013 that was intended by the donors to be expended in 2014. The cash was received in 2014. (Expenses are included in transaction 8.)

7. $575,000 in cash previously restricted for equipment purchases was expended in 2014. The Museum Association records all equipment in the unrestricted class of net assets.

8. In addition to the amount expended in transaction 5, expenses (paid in cash) amounted to (a) museum displays, $1,300,000; (b) museum school, $90,000; (c) management and general, $350,000; (d) fundraising, $250,000; and (e) membership development, $200,000.

9. Depreciation on museum fixed assets amounted to: (a) $40,000 for museum displays, (b) $7,000 for museum school; (c) $12,000 for management and general, (d) $4,000 for fund-raising, and (e) $4,000 for membership development.

Numbers 8 and 9 give you enough information to design your financial statements.

Required:

Prepare journal entries to record these transactions. Prepare a Statement of Activities for the Harrisonburg Museum Association for the year ended December 31, 2014. The beginning net asset balances were unrestricted, $400,000; temporarily (time) restricted, $150,000; and permanently restricted, $3,500,000.