Question
Youth Camps, Inc. is a not-for-profit organization that owns a number of summer camps for inner-city children. At the end of last year, the organization
Youth Camps, Inc. is a not-for-profit organization that owns a number of summer camps for inner-city children. At the end of last year, the organization reported the following trial balance:
DR | CR | |
---|---|---|
Cash | $399,600 | |
Investments | 5,328,000 | |
Contributions receivable | 1,154,400 | |
Property, plant and equipment, net | 2,664,000 | |
Payables | $888,000 | |
Long-term liabilities | 1,776,000 | |
Net assets—without donor restrictions | 3,552,000 | |
Net assets—with donor restrictions | 3,330,000 | |
$9,546,000 | $9,546,000 |
The investments are allocated as follows: 40% are unrestricted, 60% are donor restricted. Investment income (paid in cash) is 5% for the current year.
During the year, the organization received $6,216,000 in donations without donor restrictions and $621,600 in donations with donor restrictions. All of these donations are on account. In addition, it recognized program expenses of $5,772,000 and expenses relating to support of $821,400, both on account. Of the program expenses, $444,000 is spent using net assets with donor restrictions for approved purposes, thus receiving the appropriate release from the donors’ restrictions.
Youth Camps collected $6,660,000 of contributions receivable, paid $6,438,000 of payables, and purchased additional land in the amount of $288,600 (depreciation expense of $199,800 allocated 90% to program expenses and 10% to support expenses). Interest expense on the long-term debt is included in the expenses referenced above, and no repayment of the principal is recognized during the year.
a. Prepare journal entries for the organization’s financial activities during the year.
General Journal | ||
---|---|---|
Description | Debit | Credit |
Cash | Answer | Answer |
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictions—with donor restrictionsNet assets released from restrictions—without donor restrictionsPayablesProperty, plant and equipment, netRevenues—investment (with donor restrictions) | Answer | Answer |
Support—contributions (without donor restrictions) | Answer | Answer |
Support—contributions (with donor restrictions) | Answer | Answer |
Revenues—investment (without donor restrictions) | Answer | Answer |
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictions—with donor restrictionsNet assets released from restrictions—without donor restrictionsPayablesProperty, plant and equipment, netRevenues—investment (with donor restrictions) | Answer | Answer |
To record recognition of support and revenues. | ||
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictions—with donor restrictionsNet assets released from restrictions—without donor restrictionsPayablesProperty, plant and equipment, netRevenues—investment (with donor restrictions) | Answer | Answer |
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictions—with donor restrictionsNet assets released from restrictions—without donor restrictionsPayablesProperty, plant and equipment, netRevenues—investment (with donor restrictions) | Answer | Answer |
To release net assets from restrictions. | ||
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictions—with donor restrictionsNet assets released from restrictions—without donor restrictionsPayablesProperty, plant and equipment, netRevenues—investment (with donor restrictions) | Answer | Answer |
Expenses-support | Answer | Answer |
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictions—with donor restrictionsNet assets released from restrictions—without donor restrictionsPayablesProperty, plant and equipment, netRevenues—investment (with donor restrictions) | Answer | Answer |
To record recognition of expenses. | ||
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictions—with donor restrictionsNet assets released from restrictions—without donor restrictionsPayablesProperty, plant and equipment, netRevenues—investment (with donor restrictions) | Answer | Answer |
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictions—with donor restrictionsNet assets released from restrictions—without donor restrictionsPayablesProperty, plant and equipment, netRevenues—investment (with donor restrictions) | Answer | Answer |
To record collection of receivables. | ||
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictions—with donor restrictionsNet assets released from restrictions—without donor restrictionsPayablesProperty, plant and equipment, netRevenues—investment (with donor restrictions) | Answer | Answer |
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictions—with donor restrictionsNet assets released from restrictions—without donor restrictionsPayablesProperty, plant and equipment, netRevenues—investment (with donor restrictions) | Answer | Answer |
To record payment on account payables. | ||
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictions—with donor restrictionsNet assets released from restrictions—without donor restrictionsPayablesProperty, plant and equipment, netRevenues—investment (with donor restrictions) | Answer | Answer |
Expenses-program | Answer | Answer |
Expenses-support | Answer | Answer |
AnswerCashContributions receivableDepreciation expenseExpenses-programInvestmentsLong-term debtNet assets released from restrictions—with donor restrictionsNet assets released from restrictions—without donor restrictionsPayablesProperty, plant and equipment, netRevenues—investment (with donor restrictions) | Answer | Answer |
To record purchase of long-term assets and recognize depreciation. |
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 | Answer | Answer | Answer |
Revenues—investment | Answer | Answer | Answer |
Net assets released from restrictions | Answer | Answer | Answer |
Total support and revenue | Answer | Answer | Answer |
Expenses—program | Answer | Answer | Answer |
Expenses—support | Answer | Answer | Answer |
Total expenses | Answer | Answer | Answer |
Change in net assets | Answer | Answer | Answer |
Net assets beginning of year | Answer | Answer | Answer |
Net assets end of year | Answer | Answer | Answer |
Statement of Financial Position | |
---|---|
Cash | Answer |
Investments | Answer |
Contributions receivable | Answer |
Total current assets | Answer |
Property plant and equipment, net | Answer |
Total assets | Answer |
Payables | Answer |
Total current liabilities | Answer |
Long-term liabilities | Answer |
Total liabilities | Answer |
Net assets—without donor restrictions | Answer |
Net assets—with donor restrictions | Answer |
Total net assets | Answer |
Total liabilities and net assets | Answer |
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