Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
The OPI Long Term Care Centre is an NFPO funded by government grants and private donations. It prepares its annual financial statements using the deferral
The OPI Long Term Care Centre is an NFPO funded by government grants and private donations. It prepares its annual financial statements using the deferral method of accounting for contributions, and it uses only the operations fund to account for all activities. The following summarizes some of the transactions made for the year ended March 31, Year 6: The founding member of OPI contributed $200,000 on the conditions that the principal amount be invested in marketable securities and that only the income earned from the investment is spent on operations. During the year, a public campaign was held to raise funds for daily operations for the current year. Cash of $900,000 was collected, and pledges for an additional $100,000 were received by the end of the year. It is estimated that approximately 95% of these pledges will be collected early in the new year. The provincial government pledged $600,000 for the year to cover operating costs and an additional $950,000 to purchase equipment and furniture. All of the grant money was received by the end of the year, except for the last $50,000 to cover operating costs for December. OPI used the $950,000 received from the provincial government to purchase equipment and furniture for the care facility. The amortization of these assets amounted to $90,000 for the year. Residents of the facility are charged a fee based on their ability to pay. One resident paid $30,000 on January 1, Year 6 to cover his fee for the entire calendar year. Invoices totalling $1,450,000 were received for goods and contracted services. Of these invoices, 90% were paid by the end of the fiscal year. Required: In accordance with the requirements of the CPA Canada Handbook, prepare the journal entries necessary to reflect the transactions. Record contribution by the founding member and investment of the same in marketable securities. Record cash collected and pledges receivable during the year. Record grant money received and receivable. Record purchase of equipment and furniture. Record amortization expense. Record recognition of revenue. Record the receipt of fees paid by a resident for the facility to be provided for the entire calendar year. Record invoices received for goods and services
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started