LJNonprofit Accounting Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ NONPROFIT ORGANIZATIONS A. B. Nonprofit Organizations: 1. Private Not-for-Profit Colleges/Universities 2. Private Not-for-Profit Hospitals/Healthcare Entities 3. Voluntary Health & Welfare Organizations 4. Any Other Nonprofit Organization (labor union, research foundation, church, etc.) Instead of GASB standards, all these nonprofits: 1. Follow FASB nonprofit model. 2. Carry and depreciate their own 3. Carry and service their own 4. Use “normal” accrual accounting (not modify accrual). 5. Measurement focus: provide information for the entity as a whole. 6. Deal with restricted money (must be restricted by an 7. Deal with gifts, bequests, donations, grants, etc. fixed assets . long term debt, such as bonds payable Notes: 1 outside party). 000 To record receipt of donation restricted to purchase equipment.Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ DONATED MONEY Nonprofits use normal accrual accounting.000 Net assets released from restriction To record donation used for intended purpose Net Assets Temporarily Restricted is a(n) B/S Net Assets Released from Restriction is I/S a(n) B/S=Balance Sheet I/S=Income Statement 2 100.000 To set up Net Asset account on B/S Next Year: Funds spent. . account.000 account.000 Gift restricted to purchase equipment Cash Temporarily restricted revenue 100.000 Year-end: Equipment still not purchased Temporarily restricted revenue 100. Pledged (promised) Example: $100. 100. Collected or B. equipment purchased Equipment Cash To record purchase of equipment 100.000 Net assets temporarily restricted 100. so restricted money is recorded as revenue immediately when either: A.000 100.000 Net assets temporarily restricted 100. ).000 To record pledges at FV in the year the pledges are made. Donated Services are met: --. in the year the pledge is made.000 are recorded. Pledges --. Based on past experience.Record as revenue at fair market value. Services donated would have been paid for otherwise by the nonprofit.Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ PLEDGES & DONATED SERVICES A.000 Allowance for uncolletible 50. Pledges receivable 650. Example: Nonprofit Hospital has a pledge drive. they expect to collect 100% of the restricted pledges but $50. .000 Unrestricted revenue 400. and either 2.000 xxx revenue (Notice: both a revenue so it washes out. Fair value of the service is determinable.Record as both an expense and a revenue if the following criteria 1.000 Temporarily restricted revenue 200. B. Nonfinancial assets are created or enhanced.000 in pledges have some kind of restriction.000 on the unrestricted pledges will not be collected. net of uncollectibility. $200. Example: Nuts donate nursing services to a private. or 3. not-for-profit hospital xxx expense 50. It’s all about and an full disclosure 3 expense 50. Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ STATEMENTS OF FINANCIAL POSITION & ACTIVITIES A. a balance sheet) Assets XXXX Liabilities XXX Net Assets: Unrestricted Temporarily Restricted Permanently Restricted XXX XXX XXX Total Liabilities and Net Assets B. XXXX Statement of Activities Revenues (restricted and unrestricted) Plus Net Assets Released From Restrictions XXXX XX XXXX Less Expenses (XXX) Net Change: Net Assets: Unrestricted Net Assets: Temporarily Restricted Net Assets: Permanently Restricted Notes: 4 XXX XXX XXX . Statement of Financial Position (i..e. Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ STATEMENT OF CASH FLOWS Statement of Cash Flows --.FASB Format (must be the Direct Method) 1. Cash Flow From Investing Activities (including works of art) 3. Cash Flow From Operating Activities (includes unrestricted items) 2. Cash Flow From Financing Activities (includes interest or dividend income restricted for long-term purposes and contributions restricted for long-term purposes) Cash Flows From Operating Activities Cash received from customers Cash paid to suppliers. employees. taxes Cash paid for interest Cash received for interest and dividends XXXX (XXX) (XXX) XX Net cash provided (used) by Operating Activity Cash Flow From Investing Activities Buy or Sell Property. 5 . Plant or Equipment Buy or Sell Investments XXXX XXXX XX Net cash provided (used) by Investing Activity Cash Flow From Financing Activities Borrow or repay debt principal Dividend paid Issue stock Buy or sell Treasury Stock XXXX XXXX (XXX) XXX XX Net cash provided (used) by Financing Activity XXXX Net increase/decrease in cash and cash equivalents XXXX Cash and cash equivalents at the beginning of period XXXX Cash and cash equivalents at the end of the period XXXX Independently answer multiple-choice questions 1 – 15. It should be reclassified from unrestricted net assets to temporarily restricted net assets. ○ It should not be included.15 1. The statement of cash flows as cash flows from investing activities. a nongovernmental not-for-profit art museum. c. ○ Operating activity inflow Investing activity inflow Financing activity inflow As a noncash transaction (8605) 6 . ○ Total net assets Unrestricted net assets Temporarily restricted net assets Permanently restricted net assets (8327) 2. b.Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ MULTIPLE-CHOICE QUESTIONS 1 . all expenses are reported as decreases in which of the following net assets classes? a. b. In the preparation of the statement of activities for a nongovernmental not-for-profit organization. d. b. It should be included as a decrease in unrestricted net assets. depending on donor-imposed restrictions on the assets. II. d. Famous. d. I only II only Both I and II Neither I nor II (6812) 4. c. b. ○ The statement of activities as permanently restricted revenues.000 ware paid to Famous in the current year. c. In the previous year. has elected not to capitalize its permanent collections. How should a nongovernmental. It should be included as an increase in temporarily restricted net assets. not-for-profit organization report donor-restricted cash contributions for long-term purposes in its statement of cash flows? a. How should a nongovernmental not-for-profit organization report depreciation expense in its statement of activities? a. d. This transaction would be reported in I. (8773) 3. a. a bronze statue was stolen. The statue was not recovered and insurance proceeds of $35. c. 000 7 . d.000. a nongovernmental not-for-profit corporation.000 $7. In which section of the organization’s statement of cash flows should the transaction be reported? a. On December 30.Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ 5. youth activities generated revenues of $89. which it used to purchase a truck. Operating activities Investing activities c. ○ In cash inflow and cash outflow from investing activities In cash inflow and cash outflow from financing activities In cash inflow from financing activities and cash outflow from investing activities In cash inflow from operating activities and cash outflow from investing activities (8112) 6. During the year. b. Capital and related financing activities (7746) 7. shares with donor stipulated requirements as follows: Shares valued at $5. As a consequence of the receipt of the Day shares. ○ $0 $2.000 (5475) 8.000.000 are to be sold with the proceeds used to erect a public viewing building. c. how much should Leigh report as temporarily restricted net assets on its statement of financial position? a.000 contribution restricted to youth activity programs. d.000 $125.000 and had program expenses of $95. a not-for-profit organization. An unrestricted cash contribution should be reported in a nongovernmental not-for-profit organization’s statement of cash flows as an inflow from a. received a $7.000.000 donation of Day Co. received a $125.000. ○ b. b. d.000. ○ $0 $6.000 are to be retained with the dividends used to support current operations.000 $95.000.. A nongovernmental not-for-profit organization borrowed $5. c. What amount should Baker report as net assets released from restrictions for the year? a. c. Leigh Museum. Financial activities d.000. b. On January 2.000 $5. Shares valued at $2.000. the Baker Fund. ○ $700. His rate of pay at the tax office is $10 per hour. and the prevailing wage rate for laborers is $6.500 $50.000 $285. received $50. ○ $0 b. net of any required allowance account? a. d.000 All pledges are legally enforceable. volunteered ten hours per week for 24 weeks transferring turtle food from the port to the turtle shelter. Community’s experience indicates that 5% of all pledges prove to be uncollectible.Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ 9. Community Enhancers. $2.000 from Ame Company to sponsor a play given by Oz at the local theater.500 (7066) 11.000 8 (7747) . However.000 $380. c.560 d. a nongovernmental not-for-profit organization. a nongovernmental not-for-profit organization.500 $47. The Turtle Society. What amount should Community report as pledges receivable.50 per hour.000 Pledges Receivable 700.000 Unrestricted Rev 380. $1. which generally cost $100 each.000 $665. c. Oz gave Ame 25 tickets.500 Contribution Rev 47. received the following pledges: Unrestricted Restricted for capital additions $400. a clerk at the local tax collector’s office.000 Allowance 35. What amount of ticket sales revenue should Oz record? a.000 Temp Rest Rev 285. a nongovernmental not-for-profit organization. Chris. d. Ame received no other benefits. receives numerous contributed hours from volunteers during its busy season.400 (8352) 10. What amount of contribution revenue should Turtle Society record for this service? a. b.000 Cash 50. ○ $0 $2. Oz. $840 c.000 Ticket Rev 2. b.000 300. $10. ○ b. ○ b. Janna Association. received a cash gift with the stipulation that the principal be held for at least 20 years.000. Increase in permanently restricted net assets d.000 (8580) 14.000. a nongovernmental not-for-profit organization. Which of the following assets of a nongovernmental not-for-profit charitable organization must be depreciated? a. A freezer costing $150. An unrestricted asset d. Land valued at $1 million being used as the site of the new senior citizen home d. How should the cash gift be recorded? a. Settam. spent $1 million of temporarily restricted cash to acquire land and building.000 for construction in progress for senior citizen housing c. Increase in unrestricted net assets Increase in temporarily restricted net assets c.000 are to be retained with the dividends used to support current operations.000.000 c. A temporarily restricted asset A permanently restricted asset c.000 d. ○ b. Hann School. A bulk purchase of $20. What amount should Settam include as unrestricted net assets as a result of this donation? a. $ 8. $0 $ 2.000 are to be sold with the proceeds used for renovation. How should this be reported in the statement of activities? a. A temporary liability (8113) 15. Shares valued at $2. ○ b. received a donation of stock with donor-stipulated requirements as follows: Shares valued at $8.000 for storing food for the soup kitchen Building costs of $500.000. a nongovernmental not-for-profit organization. Decrease in permanently restricted net assets 9 (8578) .000 of linens for its nursing home (8110) 13. a nongovernmental not-for-profit organization.Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ 12.000. If it is . Optional: Funds used for internal reporting All these funds are organized around one principle: is the money or is it unrestricted restriction or is it a 1. restricted permanent restriction? . because the board can change their mind) d. 3 Net Assets Positions: and 2. Plant Replacement & Expansion Fund (1) Gifts / bequests / grants / donations temporarily restricted for capital additions (2) Net Asset Position: temporary c. Endowment Funds (1) Pure or Permanent Endowment Funds (2) Term Endowment Funds (3) Net Asset Positions: permanently 10 & temporarily . Agency activity (hospital acts as an agent) unrestricted permanent restricted . Fixed assets and accumulated depreciation b.Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ HOSPITALS A. restricted. temporarily e. Specific Purpose Fund (1) Gifts / bequests / grants / donations temporarily restricted for operational purposes (2) Net Asset Position: temporary b. Required: FASB nonprofit model used for external reporting B. Long-term debt c. Donor-Restricted Funds: a. is it a restricted temporarily Unrestricted Fund: General Fund (day-to-day operations) a. Board-designated assets (internally restricted money is technically unrestricted. Nonoperating gains/losses Unrestricted gifts. Statement of Financial Position b. Required Statements for External Reporting a.) C. linens) Gifts for charity care 3. Statement of Cash Flows (FASB format --.see page 5. Other operating revenue Educational programs Cafeteria Vending machines Pay parking lot Gift shop Specific purpose grants FMV of donated services FMV of donated supplies (medicine.three revenue categories: 1. 11 .Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ 3. bequests Gains/losses on sales of assets Unrestricted endowment income Unrestricted interest/dividend income Independently answer multiple-choice questions 16 – 18. Patient service revenue (Gross Patient Service Revenue less Charity Care equals Patient Service Revenue less 3rd Party Contractual Adjustments equals Net Patient Service Revenue) 2. Statement of Activities --. A city hospital would follow the GASB format. a not-for-profit organization with no governmental affiliation.000. d.000 (1422) 17.000 (7790) 18. b.000. Under Abbey Hospital’s established rate structure.000 $690. c. How much should Abbey record as patient service revenue for the year? a.500.000 What amount would the hospital report as net patient service revenue in its statement of operations for the current year ended December 31? a.000 $4.000 Difference between established billing rates and fees negotiated with third-party payors (contractual adjustments) 70.000.. Inc.000 6.000-1.000.000 for the year.18 16.000 $5. b. ○ $6. the hospital would have earned patient service revenue of $6. d.500. Which fund may the hospital use to account for this liability? a.000.000 Provisions for bad debts 15.000 $5. c. $705.000. A not-for-profit hospital issued long-term tax exempt bonds for the hospital’s benefit.000 to third-party payors. ○ b.000 and discounts of $500. reported the following in its accounts for the current year ended December 31: Gross patient services revenue from all services provided at the established billing rates of the hospital (note that this figure includes charity care of $25.000 d. Hospital.000 c. However. $680. The hospital is responsible for the liability.000) $775. Abbey did not expect to collect this amount because of charity care of $1. ○ Enterprise Specific purpose General General long-term debt account group (4663) 12 .Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ MULTIPLE-CHOICE QUESTIONS 16 .000=5. $735.000. Pure (net assets permanently restricted) b. Quasi (board-designated assets.Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ COLLEGES A. Retirement of Indebtedness (net assets temporarily restricted to service debt) d. Agency Fund 4. Statement of Financial Position 2. Statement of Cash Flows (FASB format --. Unrestricted Current Fund (current operations) 2. Annuity Income and/or Life Income Funds 6.see page 5. Optional: Funds used for internal reporting 1.) 13 . Term (net assets temporarily restricted) c. Loan Fund 5. Renewal & Replacement (net assets temporarily restricted for major repairs) C. Investment in Plant (net assets unrestricted) c. Endowment Funds a. Required Statements for External Reporting 1. Unexpended Plant (net assets temporarily restricted to capital additions) b. net assets unrestricted) 7. State or city college would follow GASB format. Plant Funds: a. Restricted Current Fund 3. Required: FASB model used for external reporting B. Research. not revenue reductions: (1) Scholarships (2) Fellowships (3) Tuition Remissions (faculty’s children attend free) b. General & Administrative. Refunds --.Expenditures. Bookstores. Statement of Activities a.Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ 3.Revenue reduction c. Types of Expenses: 3 categories (1) Education & General (Faculty salaries. Fund Raising) Independently answer multiple-choice questions 19 – 23. Tuition Waivers --. Financial Aid) (2) Auxiliary Enterprise (Cafeteria. Student Services. 14 . Athletic Programs) (3) Support: Management. 000 cash gift restricted for scholarships A notice that the college is named as a beneficiary of $10. and tuition remissions of $100.000 for tuition and fees.000 pledge to be paid the following year A $25.9000.23 19. b.000 were granted to students. What amount should Ames report for the period as unrestricted current fund gross revenues from tuition and fees? a.000 70.000. ○ $2.000 $2.930. c. Ames University assessed its students $3.000 (8077) 20.000 $2. c. d.500.900.000.000 (4140) 15 .000 $2. c. The net amount realized was only $2.000 because scholar-ships of $400.500. d. b.000 were allowed to faculty member’s children attending Ames. However.000 $35.000 $75. For the fall semester. Public College received the following: An unrestricted $50. Unity University assessed its students $3.900.000 for tuition and fees.000 in a recent graduate’s will What amount of contribution revenue should Public College report in its statement of activities? a. ○ $25. During the year.000 $3. b.Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ MULTIPLE-CHOICE QUESTIONS 19 .000.930.970.000 2.000. ○ $2.000 because of the following reductions: Tuition remissions granted to faculty member’s families Class cancellation refunds $30.000+30.000 $2.000 $3.000 (1406) 21.900.000 How much unrestricted current funds revenues from tuition and fees should Unity report for the period? a.600. d. the net amount realized was only $2. For the summer session.000 $85.000=2. d. I and II I and III c. A college’s plant funds group includes which of the following subgroups? I. Renewals and replacement funds Retirement of indebtedness funds Restricted current funds a. ○ b. III. b. c.Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ 22. ○ Endowment Term endowment Quasi-endowment Restricted (9096) 23. II and III d. I only (2102) Notes: 16 . the income from which will be used for a specified purpose? a. What describes a private nonprofit university’s internally designated asset . II. Plant or Land.see page 5) 3.Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ VOLUNTARY HEALTH & WELFARE ORGANIZATIONS A. net assets unrestricted) C. gifts. Optional: Funds used for internal reporting 1. Quasi (board-designated assets. Building & Fixed Asset Fund 4. Revenue (1) Program Revenue (2) Membership Dues (3) Fees for Services (4) Interest and Dividend Income b. and special events 17 . Restricted Current Fund 3. Term (net assets temporarily restricted) c. Statement of Cash Flows (FASB format --. pledges. Endowment Funds: a. bequests. Unrestricted Current Fund 2. Support (Public): contributions. Loan Fund 6. Pure (net assets permanently restricted) b. Statement of Financial Position 2. Custodian Fund (identical to an Agency Fund) 5. Statement of Activities a. Annuity Income and/or Life Income Funds 7. Required FASB model used for external reporting B. Required Statement for External Reporting 1. Program Expenses (to meet your mission) (1) Research (2) Education (3) Health b. 18 .Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ 4. Statement of Functional Expenses a. Support Expenses (1) Fund Raising (2) Management (3) General & Administrative Notes: Independently answer multiple-choice questions 24 – 27. ○ $850. d. The cash donation should be accounted for as a.000 $600. Revenue in 2001. c.27 24. and as a deferred credit in the balance sheet at the end of 2001 and 2002 (4602) 26. what amount should be reported under the classification of program services? a.000 In the statement of activity.000 100.Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ MULTIPLE-CHOICE QUESTIONS 24 .000 200. d. A voluntary health and welfare organization received a cash donation in 2001 from a donor specifying that the amount donated be used in 2003. Revenue in 2003.and 2003. A non-for-profit voluntary health and welfare organization should report a contribution for the construction of a new building as cash flows from which of the following in the statement of cash flows? a. Revenue in 2003. c.000 $500. ○ Revenue in 2001 b. A labor union had the following expenses: Labor negotiations Fund-raising Membership development Administrative and general $500.000 50. b. and as a deferred credit in the balance sheet at the end of 2001 and 2002 c. and 2002.000 (1362) 19 . b. and no deferred credit in the balance sheet at the end of 2001 and 2002 d.000 $550. ○ Operating activities Financing activities Capital financing activities Investing activities (7767) 25. ○ $300. If 15% of the unrestricted pledges are expected to be uncollectible. c. a voluntary health and welfare organization receives $300. $100.000 $170.000 in unrestricted pledges. b.000 $270.000 Notes: 20 .000 has been designated by donors for use next year to support operations.000 $200. Of this amount. During the current year. d.Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ 27. what amount of unrestricted support should the organization recognize in its current-year financial statement? a. Refundable advance --.if ANY of the four following conditions are met: a. Nonprofit & beneficiary are financially interrelated Cash 3. Application Donor transfers assets to nonprofit organization as trustee for beneficiary. and EITHER: a. nonprofit is middleman holding the money temporarily until it goes to the beneficiary.000 Liability 3. 2. Contribution / Support / Revenue --.Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ NONPROFIT AS TRUSTEE A.000 . Donor may revoke donation / gift d.it is NOT refundable. Nonprofit has variance power (right to redirect assets to another beneficiary) OR b. Donor retains right to direct the assets b. Treatment Nonprofit organization treats such assets as: 1. Donor specifies itself or affiliate as beneficiary. Donor controls the nonprofit / recipient c.000 Revenue To record assets donated as contributions / support. B. 21 3. and it is not an equity transaction Cash 3.000 To record donated assets and related liability. Donor & nonprofit are financially interrelated. Equity transaction --.Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ 3. AND b. It’s not refundable. 22 .000 Net Assets 3. Cash 3. Donor specifies itself or affiliate as beneficiary. AND c.000 Notes: Independently answer multiple-choice questions 28 – 30.ALL of the following three conditions are met: a. ○ Permanently restricted Unrestricted Temporarily restricted Donor restricted (7762) 30.” This donation is conditional upon the university raising matching funds within the next 12 months.000 in the net assets section of the statement of financial position? a.000 of these contributions would be used to create an endowment. Gridiron University is a private university.000 to Gridiron for the purpose of funding a “center for the study of sports ethics. Arkin Corp. is a nongovernmental non-for-profit organization involved in research. ○ As a temporarily restricted support As unrestricted support As a refundable advance As a memorandum entry reported in the footnotes 23 (8787) . c. At the end of the current year. How should this donation be accounted for? a. d. During the current year. b.30 28. Mill’s board of directors stipulated that $75. d. b. received $100. a nongovernment non-for profit organization.Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ MULTIPLE-CHOICE QUESTIONS 28 . c. ○ Salaries of staff researchers involved in research Salaries of fundraisers for funds used in research Costs of equipment involved in research Costs of laboratory supplies used in research (8775) 29.000 in unrestricted contributions from the general public. b. how should Mill report the $75. The university administrators estimate that they have a 50% chance of raising the additional money. c. Arkin’s statement of functional expenses should classify which of the following as support services? a. d.000. A successful alumnus has recently donated $1. Mill Foundation. 000+12. 28. Community reported $22.000+12.year 1 and year 2 $22.Year 1 promises (collected and expended in year 2) --.000 28. Items 1 through 4 are based on the following selected transactions that occurred during Community’s year 2 calendar year: Unrestricted written promises to contribute cash --.000 0 関係なし Cash amount of $37.Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ SIMULATION QUESTIONS SIMULATION: Nonprofit Promise Transactions Community Service. year 2.000 2 --. or Correctly stated.000 if matching funds are raised for the capital campaign during year 2 --.Year 1 promises (collected in year 2) --. statement of financial position and year 2 statement of activities.Year 2 promises (uncollected) Written promises to contribute $25.000 2 12. Item Choice 1.000 as contributions --.temporarily restricted.000 24 .Year 2 promises (collected in year 2) --.000 as contributions receivable. Inc.000 3 95.Cash received in year 2 from contributor as a good faith advance --. 4 --. 28.000 as net assets released from restrictions (satisfaction of use restrictions).Expenditure of full amount of donation July 1. Community reported $97. no such policy exists with respect to gifts of long-lived assets.000+20. However. 10. Understated.000 2 20. 4 --.000 Understated 3. Community implies a time restriction on all promises to contribute cash in future periods. year 2 Items 1 through 4 represent the year 2 amounts that Community reported for selected financial statement elements in its December 31.Year 2 promises (collected and expended in year 2) --. For each item.000 as net assets released from restrictions (due to the lapse of time restrictions). year 1. is a nongovernment not-for-profit voluntary health and welfare calendar-year organization that began operations on January 1.Matching funds received in year 2 25. It performs voluntary services and derives its revenue primarily from voluntary contributions from the general public. Community reported $37. Community reported $28.000+37.000 1.000 received in year 1 with donor’s only stipulation that a bus be purchased 37.Year 2 promises (uncollected) Written promises to contribute cash restricted to use for community college scholarships (year 1 and year 2) 10.000 1. Correct 4. indicate whether the amount was Overstated. Overstated (6656) 4.000 Understated 2.000=40. Fair value December 31.000 0 0 (6674) 25 .000 50.debt securities 9.Instructor salaries paid 30.Dividend income 10.000+50.Expenses 5.Principal payment in year 2 1. However. Inc. 25% for office activities) --.Face value $90.000 40.000 1.Director of community activities salary --. It performs voluntary services and derives its revenue primarily from voluntary contributions from the general public. 4.Business manager salary --.000 Program expenses 8. 7.000 20.Space rental (75% for community activities. year 1.000)=8.Admission fees --.000+26. year 2 --.000 12.Sales of food and drinks --.Printing and mailing costs for pledge cards 60.000 3 --.000 4 For Items 1 through 7.000 4 2. is a nongovernmental not-for-profit voluntary health and welfare calendar-year organization that began operations on January 1.000 Short-term investment in equity securities in year 2 --.Interest earned in year 2 9.000+20. no such policy exists with respect to gifts of long-lived assets.000 4 Other cash operating expenses --.Fair value at December 31.Cash received during year 2 --. 1.000 8.400 hrs. enter the appropriate amount for each of the following financial statement elements in the year 2 statement of activities.000 1.000 General fundraising expenses (excludes special events) Printing & mailing Income on long-term investments --.Interest payment in year 2 --.000 99.000 4.000 4 20. Items 1 through 7 are based on the following selected transactions that occurred during Area Help’s year 2 calendar year: Debt security endowment received in year 2 income to be used for community service --.General bookkeeper salary --. 3 --.unrestricted Contributed voluntary services Amounts 88.000 Music festival to raise funds for a local hospital --. Item Contributions --. 2.000 8.000 3 10 concerned citizens volunteered to serve meals to the homeless --.000 14. free. 5.permanently restricted Fair value at time of receipt Revenues --.000 2. 2.Nonprofit Accounting ￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣￣ SIMULATION: Nonprofit Statement of Activities Area Help.Fair value at time of receipt 88. fair market value of services $5 per hr.000x75%=99. Round all amounts to the nearest whole dollar. 3. Area Help implies a time restriction on all promises to contribute cash in future periods.000 2 Reading Material donated to Area Help and distributed to the children in year 2 --.Cost --.000 5.000-87.000-(88.000 --.fees Admission fee Investment income --. 6. year 2 87.Fair market value Federal youth training fee for service grant --.000 26.000 5 Short-term bank loan in year 2 --.