Question
The information below was taken from the records of Geneva Preschool, a private not-for-profit organization, for the year 2018. Geneva Preschool provides free instruction for
The information below was taken from the records of Geneva Preschool, a private not-for-profit organization, for the year 2018. Geneva Preschool provides free instruction for children from low-income families. Its trial balance, January 1, 2018, is as follows:
| Debit | Credit |
Cash | $ 100,000 |
|
Equipment & furnishings, net | 1,500,000 |
|
Building, net | 3,500,000 |
|
Accounts payable |
| $ 200,000 |
Net assetsunrestricted |
| 3,400,000 |
Net assetstemporarily restricted | _______ | 1,500,000 |
| $ 5,100,000 | $ 5,100,000 |
Activities for 2018 are listed below. NOTE: expenses are divided between two categories on the Statement of Activities: programs and administrative.
1. Unrestricted cash contributions were $4,500,000.
2. On January 1, 2018, a donor made a documented promise of $500,000.
3. Each year, Geneva collects donor-restricted contributions to purchase computers and software for educational programs. During 2018, $200,000 was received and $500,000 was spent; $400,000 on computers and $100,000 for software. Geneva capitalizes the computers as equipment and expenses the software.
4. Out-of-pocket operating expenses for the year, not including the software in 3. above, were $4,200,000. The year-end accounts payable balance, all related to operating expenses, was $150,000. Operating expenses are allocated 70% to program services and 30% to administrative services.
5. A licensed CPA did all of Genevas required financial statements and IRS forms for free. Fair value of these services is $25,000, classified as administrative.
6. Depreciation for the year on equipment and furnishings was $250,000. Depreciation on the building was $600,000. All depreciation is split as follows: 50% administrative and 50% program services.
Required: Make the appropriate journal entries to record each of events above.
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