The Watson Foundation, a private not-for-profit entity, starts 2017 with cash of $122,000; contributlons recelvable (net) of $222,000; Investments of $322,000; and land, builldings, and equipment of $222,000. In addition, Its unrestricted net assets were $444,000, temporarly restricted net assets were $122,000, and permanently restricted net assets were $322,000. Of the temporarly restricted net assets, 50 percent must be used to help pay for a new bullding; the remalnder is restricted for salaries. No Implied time restrictlon was designated for the building when purchased. For the permanently restricted net assets, all income is unrestricted. During the current year, the entity has the following transactions: Computed Interest of $42,000 on the contributions recelvable. Received cash of $122,000 on the contributions and wrote off another $6,200 as uncollectible. Received unrestricted cash gifts of $202,000. Pald salaries of $112,000 with $37,000 of that amount coming from restricted funds. Received a cash gift of $34,000 that the entity must convey to another charity. However, Watson has the right to glve the money to a different organizatlon If It so chooses. Bought a building for $522,000 by signing a long-term note for $461,000 and using restricted funds for the remainder. Collected membership dues of $52,000. Indlviduals recelve substantlal benefits from the memberships ReceIved Income of $52,000 generated by the permanently restricted net assets. Pald rent of $34,000, advertising of $37,000, and utlities of $38,000. Recelved an unrestricted pledge of $222,000; It will be collected In five years. The organization expects to collect the entlre amount. Present value Is $171,000. It then recognized Interest of $8,200 for the year. Computed depreciation as $62,000. Paid $37,000 In Interest on the note signed to acquire the building. a. Prepare a statement of activitles for this entity for this year. b. Prepare a statement of financial position for this entity at the end of this year. WAT SON FOUNDATION Statement of Activities For Year End ing December 31, 2017 Unrestricted lemporarily Permanently Restricted Restricted Net Assets Net Assets Net Assets Contributed support 202,000 Contributions - interest 42,000 8,200 Investment revenue 52,000 Membership revenue 52,000 S 348,000 Total support and revenues 8,200 S C Net assets released from restriction Total support, revenues, and net assets released from restriction S 348,000 8,200 S Expenses General and administrative: Rent expense (34,000) Salary expense (112.000) (37,000) Advertising expense Utilities expense (38,000) (62,000) Depreciation expense Interest expense (37.000) S(320,000) Total expenses 0 C Excess of total support, revenues and net assets released from restriction over expenses Net assets at beginning of year 444,000 122,000 322,000 S 444.000 Net assets at end of year 122,000 322,000 WATSON FOUNDATION Statement of Financial Pos ition December 31, 2017 Assets Cash Contributions receivable (net) Investments. Land, buildings and equipment (net) Total assets Liabilities Notes payable Net Assets Unrestricted net assets Temporarily restricted net assets Permanently restricted net assets 0 Total liabilities and net assets S 0