The Watson Foundation, a private notforprofit 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 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 longlived 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 ofce machine within the next year or the money must be returned. Paid salaries of $90,000. Of that amount, $26,000 came from restricted funds. The payment was made to individuals doing health care work. 6. Spent the $23,000 in {4} for the appropriate office machine. 7. Received a cash gift of $12,000 that Watson must convey to another specied charity. However, Watson has the right to give this money to a different organization if officials so choose. 8. Bought a building for $500,000 by signing a longterm note for $450,000 and using restricted funds for the remainder. 9. Collected annual membership dues of $30,000. Individuals receive substantial benefits from their memberships. Ely the end of the year, twothirds of the time for the average membership has passed. 10. Received unrestricted income of $51,000 generated by net assets that must be held permanently. 11. The board of directors of the Watson Foundation vote to set aside $9,000 of its investments for emergency purposes. 12. Paid rent of $12,000 for the past month, advertising of $15,000, and utilities of $16,000. These were halffor the program service and onefourth each for the two supporting services. 13. 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. 14. Computed depreciation of $40,000, 60 percent for hearth care, 30 percent for administrative, and 10 percent for fundraising. 15. Paid $15,000 in interest on the note signed in [8}. All of this cost is assumed to be related to health care. PWNe 5" Required: at. Prepare a statement of activities for the Watson Foundation for this year. [Negative amounts should be indicated by a minus sign.) WATSON FOUNDATION STATEMENT OF ACTIVITIES For Year Ending December 31, 2020 Net Assets Net Assets Without Donor With Donor Restrictions Restrictions Contribution revenue: Donations $ 161,000 $ Interest 20,000 6.000 0 Total 20,000 167,000 0 Investment income 51,000 Exchange revenues-memberships 20,000 Total contributions and revenues 91,000 $ 167,000 $ Net assets released from restrictions Total contributions, revenues, and net assets $ 91,000 $ 167,000 $ 0 released from restrictions Expenses: Program services-healthcare Salary 90,000 Rent 6,000 Advertising 7,500 Utilities 8,000 Depreciation 24,000 Interest (15,000) 120,500Depreciation 24,000 Interest (15,000) 120.500 Supporting services-fundraising Rent 3,000 Advertising 3.750 Utilities 4.000 Depreciation 4.000 14,750 Supporting services-administrative Rent 3,000 Advertising 3,750 Utilities 4.000 Depreciation 12,000 22,750 Total expenses 158,000 Excess of total contributions, revenues, and net assets released from restriction over expenses Net assets at beginning of year 400,000 400,000 Net assets at end of year $ 400,000 $ 400,000