The Make-A-Wish Foundation is a privately funded VHWO that grants wishes to children with life-threatening illnesses. Since 1980, it has reached over 165,000 children worldwide through a network of thousands of volunteers. Suppose the Foundation's trial balance as of January 1, 2014, follows:
MAKE A WISH FOUNDATION
Trail Balance
January 1, 2014
(In thousands)Dr (Cr)
Cash....................................................................................$ 40,000
Contributions receivable, net........................................................ 20,000
Property and equipment, net........................................................ 12,000
Investments........................................................................... 120, 000
Accounts payable..................................................................... (8,000)
Notes payable........................................................................ (1,000)
Unrestricted net assets............................................................... (135,000)
Temporarily restricted net assets. .................................................. (30,000)
Permanently restricted net assets................................................... (18,000)
Total .................................................................................... $ 0
Transactions and events for 2014 are as follows (dollars in thousands):
1. Cash contributions of $157,500 were received. They consist of:
(a) $150,000 received from the public as general contributions, either through the mail or at special fund-raising events.
(b) $6,000 in grants, of which $5,000 is designated for purchase of property and equipment, $50 is a permanent endowment, and $950 is unrestricted.
(c) $1,500 in permanent endowments received from the public.
2. The contributions receivable outstanding on January 2, 2014, represent the present value of promises to contribute, discounted at 5 percent. On December 31, 2014, $15,000 was received related to these promises. These promises are undesignated.
3. Additional promises to contribute $8,000 were made on January 2, 2014, to be received over the next five years. The present value of these contributions at January 2, 2014, discounted at 5 percent is $6,000. These promises were properly recorded as contributions receivable. At the end of 2014, $2,000 was received in cash on these promises. These contributions are undesignated.
4. The investments on hand at January 1, 2014 are:
(a) A donor contributed securities several years ago; fair value at January 1,2014, is $15,000. The securities are permanently restricted. The fair value of the securities at December 31, 2014, is $12,000.
(b) $2,000 fair value of securities represent investment of permanently restricted cash contributions of $2,000 at the end of 2013. The fair value of these securities at December 31, 2014, is $ 1,500.
(a) The remainder of $103,000 fair value of securities are investments of excess cash and have a fair value of $98,000 at December 31, 2014.
(b) No securities were sold in 2014.
5. Undesignated endowments of $4,000 were donated during 2014, and the cash was invested in securities. There are no unrealized gains or losses on these investments in 2014.
6. Property and equipment of $12,000 was purchased in 2014. The $5,000 grant in 1. above was used to buy some of the property.
7. Investment income, received in cash, totaled $7,000. Of this amount, $2,000 is income restricted to specific wish fulfillment.
8. Expenses for 2014 were:
Wish granting .....................................................................$150,000
Chapter support...................................................................10,000
Fund-raising.......................................................................30,000
Management and general.......................................................16,000
Total...............................................................................$206,000
$20,000 of this total represents spending for donor-specified activities. Also included is $1,500 depreciation on Foundation property. Accounts payable increased by $800 during 2014. 9. Volunteers supplied the following services to the Foundation:
(a) $6,000 fair value of management and general services, meeting the criteria for recognition.
(b) Public service announcements with a fair value of $32,000, that don't meet the criteria for recognition.
Required
a. Present Make-A-Wish Foundation's 2014 statement of activities and December 31, 2014, statement of financial position, in good form.
b. Present Make-A-Wish Foundation's 2014 statement of cash flows, in good form. Use the direct approach for the operating section, and provide a reconciliation of change in net assets to cash from operating activities.