The American Hereditary Disease Associations private organization supporting research and education related to hereditary diseases, holds the following long-term investments at December 31, 2012:
December 31, 2012Market Value
Investment in mortgage bonds.......................... $ 800, 000
Investment in debentures ................................ 1,600,000
Investment in equity securities........................... 7,000,000
All debt investments were purchased at par value.
1. The mortgage bonds were donated several years ago; the donor stipulated that the securities be held as a permanent endowment, and income on the securities be used for research projects relating to sickle cell disease. The market value of these securities was $750,000 when donated.
2. The debentures are a recent investment of permanently restricted cash contributions of $1,600,000. There are no donor restrictions on investment income, gains or losses.
3. The equity securities are investments of permanently restricted cash contributions of $8,500,000. The donor specified that income and gains be restricted to community education programs on Crab-be's Disease. The decline in value to $7,000,000 was properly recorded.
4. Income on investments during 2013 was:
Interest on bonds........................................................... $ 60,000
Interest on debentures...................................................... 80,000
Dividends on equity securities............................................. 420,000
5. Market values at December 31, 2013 are:
Investment in bonds...................................................... $ 850,000
Investment in debentures................................................ 1,700,000
Investment in equity securities.......................................... 7,200,000
Required
Show how the events of 2013 are reported in the American Hereditary Disease Association's statement of activities. Identify the effect on each category of net assets.