The Watson Foundation, a private not$-$for$-$profit entity, starts $2020$ with cash of $$100,000,$ contributions receivable $($net$)$ of $$200,000,$ investments of $$300,000,$ and land, buildings, and equipment $($net$)$ of $$200,000.$ Net assets without donor restrictions were reported as $$400,000,$ the same figure as the net assets with donor restrictions. Of the restricted net assets, $$300,000$ was purpose restricted whereas the other $$100,000$ had to be held permanently, although the subsequently earned income is without restriction. Fifty percent of the purpose Answer is complete but not entirely correct. restricted net assets had to be used to help pay for a new building. The remainder was restricted to the payment of officer salaries. Donors made no stipulations about the eventual reporting of buildings and other long$-$lived assets when acquired. Watson has one program service $($health care$)$ and two supporting services $($fundraising and administrative$).$

During the current year, Watson Foundation has the following transactions.

Computed interest of $$20,000$ on the unrestricted contribution receivable.

Received cash of $$100,000$ from the contributions receivable and wrote off another $$4,000$ as uncollectible.

Received unrestricted cash donations of $$180,000.$

Received $$23,000$ in cash that must be spent for a particular type of office machine within the next year or the money must be returned.

Paid salaries of $$90,000.$ Of that amount, $$20,000$ came from restricted funds. The payment was made to individuals doing health care work.

Spent the $$23,000$ in $(4)$ for the appropriate office machine.

Received a cash gift of $$12,000$ that Watson must convey to another specified charity. However, Watson has the right to give this money to a different organization if officials so choose.

Bought a building for $$500,000$ by signing a long$-$term note for $$450,000$ and using restricted funds for the remainder.

Collected annual membership dues of $$30,000.$ Individuals receive substantial benefits from their memberships. By the end of the year, two$-$thirds of the time for the average membership has passed.

Received unrestricted income of $$45,000$ generated by net assets that must be held permanently.

The board of directors of the Watson Foundation vote to set aside $$9,000$ of its investments for emergency purposes.

Paid rent of $$12,000$ for the past month, advertising of $$15,000,$ and utilities of $$16,000.$ These were half for the program service and one$-$fourth each for the two supporting services.

Received an unrestricted pledge of $$200,000.$ Watson will collect the money in five years and does not expect any part to be uncollectible. Present value at inception is $$149,000,$ but interest for the year to date is $$6,000.$

Computed depreciation of $$40,000,60$ percent for health care, $30$ percent for administrative, and $10$ percent for fundraising.

Paid $$15,000$ in interest on the note signed in $(8).$ All of this cost is assumed to be related to health care.

Required:

a$.$ Prepare a statement of activities for the Watson Foundatio b$.$ Prepare a statement of financial position for the Watson Foundation at the end of this year. $($Negotlve amounts should be lndlcated

by a minus slgn$.)$

Answer is complete but not entirely correct.n for this year.