Transaction Analysis

Analyze the following scenario: The Unified Path is an umbrella organization that solicits donations to support its many charitable suborganizations. One of these is the Millbridge Family Service (MFS). All transactions for MFS are handled through the MFS special purpose fund. For both the United Path general operating fund and MFS special purpose fund, show the impact of the fundamental equation of accounting of each of the following events.

Unified Path transfers cash to the MFS bank account for $50,000 for the MFS family counseling program. This is a direct subsidy to MFS. No repayment is required.

Unified Path has a bookkeeping department which assists the suborganizations with their purchase of insurance, supplies, payroll, and other items. This centralized approach is less expensive than if each part of the larger organization had its own bookkeeping staff. Unified Path charges MFS $400 for bookkeeping services for the month. No payment is made at this time.

MFS borrows $20,000 from Unified Paths general fund to meet a current operating shortfall. MFS will repay this loan from money received from charges to its clients within six months.