The Science Learning Institute (SLI), a not-for-profit educational center that provides science tutoring to middle school students, uses accrual accounting to prepare its annual financial statements. The SLI ended FY 2010 with the following balances in its accounts:

Accounts Payable 0

Cash 103,100

Grants Receivable, net 35,100

Inventory 2,300

Net Assets 273,500

Notes Payable 595,000

Pledges Receivable, net 10,000

PP&E, net 735,000

Wages Payable 17,000

The SLI recorded the following transactions during FY 2011, which ended on August 31, 2011.

1. SLI took out an $850,000 bank loan on September 1, 2007. The loan has an annual interest rate of 6.5% and is the only borrowing the organization has done since its inception. Principal repayments are due in 10 equal installments beginning on the first day of FY 2008. Interest payments on the loan must be made in full on the first day of the fiscal year.

2. SLI used the proceeds from the bank loan to purchase its office space on March 1, 2008. The office space cost $775,000. It is expected to have a useful life of 25 years and no salvage value. The organization uses the straight-line method of depreciation.

3. On the first day of FY 2011, SLI purchased new classroom equipment worth $20,000. The equipment is expected to have a useful life of 8 years and a salvage value of $2,000. Equipment and furniture SLI purchased in previous years depreciated by $9,000 in FY 2011.

4. SLI earned $325,000 in state grants during FY 2011, spread evenly throughout the year. This was an increase from the $304,200 in state grants that SLI earned evenly throughout FY 2010. In both FY 2010 and FY 2011, the state paid SLI with a six-week lag.

5. During FY 2011, SLI received $75,000 in donor pledges, 80% of which was collected in cash. The organization also collected $7,500 in outstanding pledges from the previous fiscal year.

6. SLIs employees earned $17,500 per month in FY 2011, a monthly increase of $500 from FY 2010. In both FY 2010 and FY 2011, SLI paid its employees with a one-month lag.

7. During FY 2011, SLI ordered $40,000 worth of classroom supplies on credit and used $35,000 of those supplies throughout the year. At the end of FY 2011, SLI still owed its vendors $7,000.

8. SLI pays $900 a month in utilities. Utilities are paid timely.

Record these events on a transactions worksheet and then create a balance sheet and activity statement for FY 2011.