Voluntary Health and Welfare Organization [AICPA Adapted] Items 1 through 6 represent various transactions pertaining to Crest Haven, a voluntary health and welfare organization, for the year ended December 31, 20X2. The information presented also includes a list of how transactions could affect the statement of activities (List A Effects) and the statement of cash flows (List B Effects). Crest Haven follows both FASB 116 and 117 (ASC 958).

Transactions

1. Pledges of $500,000 were made by various donors for the acquisition of new equipment. The equipment will be acquired in 20X3.

2. Dividends and interest of $40,000 were received from endowment investments. The donors have stipulated that the earnings from endowment investments be used for research in 20X3.

3. Cash donations of $350,000 were received from donors who did not stipulate how the donations were to be used.

4. Investments of $250,000 were acquired from cash donated in 20X0 by a donor who stipulated that the cash donation be invested permanently.

5. Depreciation expense of $75,000 was recorded for 20X2.

6. Of the amount pledged in transaction 1, $300,000 was received.

Required

Indicate how Crest Haven should report each transaction on (1) the statement of activities and (2) the statement of cash flows prepared for the year ended December 31, 20X2. Crest Haven reports separate columns for changes in unrestricted, temporarily restricted, and permanently restricted net assets on its statement of activities. In addition, Crest Haven uses the direct method of reporting its cash flows from operation activities. The items in List A Effects and List B Effects may be used once, more than once, or not at all.

Example

Cash paid to employees and suppliers: List A = D List B = I

         

	Statement of Activities		Statement of Cash Flows
	List A Effects		List B Effects
A.	Increases unrestricted net assets	H.	Increases cash flows from operating activities
B.	Increases temporarily restricted net assets	I.	Decreases cash flows from operating activities
C.	Increases permanently restricted net assets	J.	Increases cash flows from investing activities
D.	Decreases unrestricted net assets	K.	Decreases cash flows from investing activities
E.	Decreases temporarily restricted net assets	L.	Increases cash flows from financing activities
F.	Decreases permanently restricted net assets	M.	Decreases cash flows from financing activities
G.	Is not reported on the statement of activities	N.	Transaction not reported on the statement of cash flows