Question
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.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started