Wings is a not-for-profit organization dedicated to the promotion of flying in youths. It owns a number of airplanes at various airports which it uses to provide introductory flights in order to encourage young adults to pursue flight training lessons and possible careers as commercial airline pilots. At the end of last year, Wings reported the following trial balance:

	debit	Credit
Cash	$216,000
Investments	$2,880,000
Contributions Receivable	$624,000
Property, plant and equipment net	$1,440,000
Payables		$480,000
Long-term Liabilities		960,000
Net assets-without donor restrictions		1,920,000
Net assets-with donor restrictions		$1,800,000
	$5,160,000	$5,160,000

At year-end, the investments are allocated as follows:

Investment-Without Donor Restrictions	40%
Investment - With Donor Restrictions	60%

These investments earn a 5% cash return during the following year.

During the following year, Wings received $3,360,000 of unrestricted donations and $390,000 of donations whose use is restricted by donors as to use. All contributions are on account when made.

Program and support expenses for the current year are $3,120,000 and $444,000, respectively, both on account. Of the program expenses, $240,000 are funded from restricted funds as they are used for approved expenditures. During the year, Wings purchased an airplane for a cash purchase price of $348,000 and recorded depreciation expense on existing depreciable assets of $108,000 (90% of which is allocated to program expenses and 10% of which is allocated to support expenses). The organization purchased additional investments with excess cash in the amount of $144,000 and also repaid $138,000 principal amount of long-term debt. Finally, during the year, the organization collected $3,600,000 of contributions receivable and paid $3,480,000 of accounts payable.

a. Prepare journal entries for the organizations financial activities during the year.

General Journal

Description	Debit	Credit
Cash
Contributions receivable
Support-contributions (without donor restrictions)
Support-contributions (with donor restrictions)
Revenues-investment (without donor restrictions)
Revenues-investment (with donor restrictions)
To record recognition of support and revenues.
Net assets released from restrictions-with donor restrictions
Net assets released from restrictions - without donor restrictions
To release net assets from restrictions.
Expenses program
Expenses support
To release net assets from restrictions.
Property plant and equipment net
Expenses Program
Expenses Support
Cash
To record purchase of long-term assets and recognize depreciation
Investments
Cash
To record purchase of investments.
Long-term debt
Cash
To record payment on debt
Cash
Payables
To record collection of receivables.
Contributions receivable
Cash
To record payment on account payables.

b. Prepare the year-end statement of activities and statement of financial position.

Note: Use a negative sign with your answer to indicate a decrease in net assets or release of net assets from restriction.

Statement of Activities

	Without donor Restrictions	With Donor Restrictions	Total
Support-Contributions	$	$	$
Revenues-investment
Net assets released from restristions
Total support and revenue
Expenses-program
Expenses -support
Total Expenses
Change in net assets
Net assets beginning of year
Net assets end of year

Statement of Financial Position

Investments
Contributions receivable
Total current assets
Property plant and equipment net
Total assets	$
Cash overdraft	$
Payables	$
Total current liabilities
Long-term liabilities
Total Liabilities
Net assets-without donor restrictions
Net assets-with donor restrictions
Total net assets
Total Liabilities and net assets	$