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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:

DRCR
Cash$399,600
Investments5,328,000
Contributions receivable1,154,400
Property, plant and equipment, net2,664,000
Payables$888,000
Long-term liabilities1,776,000
Net assets—without donor restrictions3,552,000
Net assets—with donor restrictions3,330,000
$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
DescriptionDebitCredit
CashAnswerAnswer
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)AnswerAnswer
Support—contributions (without donor restrictions)AnswerAnswer
Support—contributions (with donor restrictions)AnswerAnswer
Revenues—investment (without donor restrictions)AnswerAnswer
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)AnswerAnswer
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)AnswerAnswer
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)AnswerAnswer
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)AnswerAnswer
Expenses-supportAnswerAnswer
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)AnswerAnswer
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)AnswerAnswer
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)AnswerAnswer
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)AnswerAnswer
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)AnswerAnswer
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)AnswerAnswer
Expenses-programAnswerAnswer
Expenses-supportAnswerAnswer
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)AnswerAnswer
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—contributionsAnswerAnswerAnswer
Revenues—investmentAnswerAnswerAnswer
Net assets released from restrictionsAnswerAnswerAnswer
Total support and revenueAnswerAnswerAnswer
Expenses—­programAnswerAnswerAnswer
Expenses—supportAnswerAnswerAnswer
Total expensesAnswerAnswerAnswer
Change in net assetsAnswerAnswerAnswer
Net assets beginning of yearAnswerAnswerAnswer
Net assets end of yearAnswerAnswerAnswer

Statement of Financial Position
CashAnswer
InvestmentsAnswer
Contributions receivableAnswer
Total current assetsAnswer
Property plant and equipment, netAnswer
Total assetsAnswer
PayablesAnswer
Total current liabilitiesAnswer
Long-term liabilitiesAnswer
Total liabilitiesAnswer
Net assets—without donor restrictionsAnswer
Net assets—with donor restrictionsAnswer
Total net assetsAnswer
Total liabilities and net assetsAnswer

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