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The Southside Counseling Center was established on January 10, 2023 to provide a variety of counseling services to community residents, including marital and family counseling

The Southside Counseling Center was established on January 10, 2023 to provide a variety of counseling services to community residents, including marital and family counseling and treatment for alcoholism and drug abuse. The centers initial resources were provided by a private foundation in the form of a $2,500,000 grant. Of this sum, the foundation designated $1,000,000 for building and equipment and $750,000 for the establishment of a special program for counseling parolees. The following transactions occurred during 2023:

1. Unrestricted cash contributions of $1,200,000 were received through the local United Way campaign. An additional $140,000 was received in direct cash contributions, of which $20,000 is restricted to the parolees program and $50,000 was for the building fund. Documented promises of $60,000 were received, collectible within the next year. These promises are unrestricted and expected to be 85% collectible. Bad debt expense is included with administrative expenses.

2. Out-of-pocket operating expenses for the year were $1,400,000. Of the total, $950,000 are program expenses, $350,000 are administrative expenses, and the remainder are fund-raising expenses. $100,000 of the expenses were unpaid at year-end.

3. The special parolees program had not yet begun as of December 31, 2023. All resources dedicated to this program were invested in short-term securities. Investment income for the year, which was reinvested, was $30,000. There are no unrealized gains or losses on the securities.

4. The center obtained a $2,400,000 mortgage to purchase a building, and obtained a $300,000 3-year note to purchase equipment. The center also used the grant to finance these purchases; the total cost of the building and equipment was $3,700,000.

5. Interest of $140,000 was accrued and paid on the mortgage and note, all allocated to administrative expenses.

6. Depreciation on the building and equipment is $190,000, all allocated to program expenses.

Required

a. Prepare journal entries to record the transactions for 2023.

General Journal
Ref. Description Debit Credit
Restricted cash Answer Answer
AnswerAccounts payableAdministrative expensesAllowance for uncollectiblesBuilding and equipment, netCashContributions receivableContributions revenue - use restrictedContributions revenue - time restrictedInvestment income-unrestrictedInvestmentsMortgage payableNet assets released from restrictions-restrictedNet assets released from restrictions-unrestrictedProgram expenses Answer Answer
AnswerAccounts payableAdministrative expensesAllowance for uncollectiblesBuilding and equipment, netCashContributions receivableContributions revenue - use restrictedContributions revenue - time restrictedInvestment income-unrestrictedInvestmentsMortgage payableNet assets released from restrictions-restrictedNet assets released from restrictions-unrestrictedProgram expenses Answer Answer
Contributions revenue - unrestricted Answer Answer

To record receipt of initial resources provided by a private foundation.

1. Cash Answer Answer
Restricted cash Answer Answer
AnswerAccounts payableAdministrative expensesAllowance for uncollectiblesBuilding and equipment, netCashContributions receivableContributions revenue - use restrictedContributions revenue - time restrictedInvestment income-unrestrictedInvestmentsMortgage payableNet assets released from restrictions-restrictedNet assets released from restrictions-unrestrictedProgram expenses Answer Answer
AnswerAccounts payableAdministrative expensesAllowance for uncollectiblesBuilding and equipment, netCashContributions receivableContributions revenue - use restrictedContributions revenue - time restrictedInvestment income-unrestrictedInvestmentsMortgage payableNet assets released from restrictions-restrictedNet assets released from restrictions-unrestrictedProgram expenses Answer Answer
Contributions revenue -unrestricted Answer Answer
Contributions revenue - use restricted Answer Answer
Contributions revenue - time restricted Answer Answer
2. AnswerAccounts payableAdministrative expensesAllowance for uncollectiblesBuilding and equipment, netCashContributions receivableContributions revenue - use restrictedContributions revenue - time restrictedInvestment income-unrestrictedInvestmentsMortgage payableNet assets released from restrictions-restrictedNet assets released from restrictions-unrestrictedProgram expenses Answer Answer
Administrative expenses Answer Answer
Fund-raising expenses Answer Answer
Accounts payable Answer Answer
AnswerAccounts payableAdministrative expensesAllowance for uncollectiblesBuilding and equipment, netCashContributions receivableContributions revenue - use restrictedContributions revenue - time restrictedInvestment income-unrestrictedInvestmentsMortgage payableNet assets released from restrictions-restrictedNet assets released from restrictions-unrestrictedProgram expenses Answer Answer
3. AnswerAccounts payableAdministrative expensesAllowance for uncollectiblesBuilding and equipment, netCashContributions receivableContributions revenue - use restrictedContributions revenue - time restrictedInvestment income-unrestrictedInvestmentsMortgage payableNet assets released from restrictions-restrictedNet assets released from restrictions-unrestrictedProgram expenses Answer Answer
Cash Answer Answer
AnswerAccounts payableAdministrative expensesAllowance for uncollectiblesBuilding and equipment, netCashContributions receivableContributions revenue - use restrictedContributions revenue - time restrictedInvestment income-unrestrictedInvestmentsMortgage payableNet assets released from restrictions-restrictedNet assets released from restrictions-unrestrictedProgram expenses Answer Answer
4. AnswerAccounts payableAdministrative expensesAllowance for uncollectiblesBuilding and equipment, netCashContributions receivableContributions revenue - use restrictedContributions revenue - time restrictedInvestment income-unrestrictedInvestmentsMortgage payableNet assets released from restrictions-restrictedNet assets released from restrictions-unrestrictedProgram expenses Answer Answer
AnswerAccounts payableAdministrative expensesAllowance for uncollectiblesBuilding and equipment, netCashContributions receivableContributions revenue - use restrictedContributions revenue - time restrictedInvestment income-unrestrictedInvestmentsMortgage payableNet assets released from restrictions-restrictedNet assets released from restrictions-unrestrictedProgram expenses Answer Answer
To record reclassification of net assets.
AnswerAccounts payableAdministrative expensesAllowance for uncollectiblesBuilding and equipment, netCashContributions receivableContributions revenue - use restrictedContributions revenue - time restrictedInvestment income-unrestrictedInvestmentsMortgage payableNet assets released from restrictions-restrictedNet assets released from restrictions-unrestrictedProgram expenses Answer Answer
Note payable Answer Answer
Restricted cash Answer Answer
AnswerAccounts payableAdministrative expensesAllowance for uncollectiblesBuilding and equipment, netCashContributions receivableContributions revenue - use restrictedContributions revenue - time restrictedInvestment income-unrestrictedInvestmentsMortgage payableNet assets released from restrictions-restrictedNet assets released from restrictions-unrestrictedProgram expenses Answer Answer
To record purchase of building.
5. AnswerAccounts payableAdministrative expensesAllowance for uncollectiblesBuilding and equipment, netCashContributions receivableContributions revenue - use restrictedContributions revenue - time restrictedInvestment income-unrestrictedInvestmentsMortgage payableNet assets released from restrictions-restrictedNet assets released from restrictions-unrestrictedProgram expenses Answer Answer
AnswerAccounts payableAdministrative expensesAllowance for uncollectiblesBuilding and equipment, netCashContributions receivableContributions revenue - use restrictedContributions revenue - time restrictedInvestment income-unrestrictedInvestmentsMortgage payableNet assets released from restrictions-restrictedNet assets released from restrictions-unrestrictedProgram expenses Answer Answer
6. AnswerAccounts payableAdministrative expensesAllowance for uncollectiblesBuilding and equipment, netCashContributions receivableContributions revenue - use restrictedContributions revenue - time restrictedInvestment income-unrestrictedInvestmentsMortgage payableNet assets released from restrictions-restrictedNet assets released from restrictions-unrestrictedProgram expenses Answer Answer
AnswerAccounts payableAdministrative expensesAllowance for uncollectiblesBuilding and equipment, netCashContributions receivableContributions revenue - use restrictedContributions revenue - time restrictedInvestment income-unrestrictedInvestmentsMortgage payableNet assets released from restrictions-restrictedNet assets released from restrictions-unrestrictedProgram expenses Answer Answer

b. Prepare Southsides statement of activities for 2023 and its statement of financial position at December 31, 2023. Prepare Southside's statement of cash flows for 2023, using the direct method for the operating section. Use a negative sign with an answer for net assets released from restrictions and change in net assets, if appropriate. Otherwise, do not use negative signs.

Southside Counseling Center Statement of Activities For the Year Ended December 31, 2023
Net Assets Without Donor Restrictions Net Assets With Donor Restrictions
Revenues, gains, and other support:
Contributions-General Answer Answer
Contributions-Grant Answer Answer
Contributions-Parolee program Answer Answer
Contributions-Building fund Answer Answer
Investment income Answer Answer
Net assets released from restrictions Answer Answer
Total revenues, gains and other support Answer Answer
Expenses:
Program expenses Answer Answer
Administrative expenses Answer Answer
Fund-raising expenses Answer Answer
Total expenses Answer Answer
Change in net assets Answer Answer
Net assets, January 1, 2023 Answer Answer
Net assets, December 31, 2023 Answer Answer

Southside Counseling Center Statement of Financial Position December 31, 2023
Assets
Cash Answer
Contributions receivable, net Answer
Investments Answer
Restricted cash Answer
Building and equipment, net Answer
Total assets Answer
Liabilities and net assets
Liabilities:
Accounts payable Answer
Note payable Answer
Mortgage payable Answer
Answer
Net assets:
Without donor restrictions Answer
With donor restrictions Answer
Answer
Total liabilities and net assets Answer

Please answer all parts of the question.

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