The board of directors of Orange Corporation, a calendar year taxpayer, is holding its year-end meeting on December 28, 2022. One topic on the board’s agenda is the approval of a $25,000 gift to a qualified charitable organization. Orange has a $20,000 charitable contribution carryover to 2022 from a prior year. Identify the tax issues the board should consider regarding the proposed contribution.
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- The following gifts are received in 2019 by a not-for-profit entity: $3,000 specified by the donor to be used to pay salaries. $12,000 specified by the donor for new conference room furniture. $6,000 specified by the donor to be held for one year before being expended. The salaries are paid in 2020 and the conference room furniture is purchased in 2019. The donor did not specify any time restriction on holding the conference room furniture. What amount should be reclassified on the Statement of Activities for 2020 from the With Donor Restrictions column to the Without Donor Restrictions column? Multiple Choice $3,000. $6,000. $9,000. $12,000. $15,000.In 2019, a state government collected income taxes of $8,000,000 for the benefit of one of its cities that imposes an income tax on its residents. The state periodically remitted these collections to the city. The state should account for the $8,000,000 in the a. general fund. b. agency funds. c. internal service funds. d. special assessment funds.The following gifts are received in 2019 by a not-for-profit entity: $3,000 specified by the donor to be used to pay salaries. $12,000 specified by the donor for new conference room furniture. $6,000 specified by the donor to be held for one year before being expended. The salaries are paid in 2020 and the conference room furniture is purchased in 2019. The donor did not specify any time restriction on holding the conference room furniture. With respect to the donations received in 2019, what amount should be reported in the Statement of Activities as net increase to Net Assets with Donor Restrictions for the year 2019? Multiple Choice $ 3,000 $ 9,000 $15,000 $18,000 $21,000
- Snow Inc., a calendar year, accrual basis corporation, wants to make a $20,000 donation to the Wild Bird Sanctuary, a qualified charitable organization, but does not have adequate funds to make the contribution in 2023. On December 28, 2023, Snow's board of directors authorizes a $20,000 contribution to the Wild Bird Sanctuary. The donation is made on April 10, 2024. Based on these facts: a. Snow's 2023 income is reduced by $10,000 and Snow's 2024 income is reduced by $10,000. b. Snow gets no tax benefit in either 2023 or 2024 for the charitable contribution. c. Snow must pay $4,200 in Federal income taxes in 2023. d. Snow must deduct the $20,000 contribution in 2024, the year of the payment. e. Snow defers payment of $4,200 in Federal income taxes in 2023.The following gifts are received in 2019 by a not-for-profit entity: $3,000 specified by the donor to be used to pay salaries. $12,000 specified by the donor for new conference room furniture. $6,000 specified by the donor to be held for one year before being expended. The salaries are paid in 2020 and the conference room furniture is purchased in 2019. The donor did not specify any time restriction on holding the conference room furniture. With respect to the donations received in 2019, what total amount should be recorded as an increase to Net Assets with Donor Restrictions? Multiple Choice $ 3,000 $ 9,000 $15,000 $18,000 $21,000The City of Arnold maintains a Public Employee Retirement Trust Fund for its public safety employees. During the year ended June 30, 2020, the following transactions occurred 1. The City contributed $ 2,400,000 in cash to the plan. Employee members contributed an additional $ 2,400,000 2. Annuity benefits in the amount of $240,000 were recorded as liabilities. 3. Annuity benefits, previously recorded as liabilities, were paid in cash in the amount of $95,000. 4. Investment income received in cash amounted to $100,000. In addition. $15.000 in interest receivable was accrued at year-end: 5. Additional investments in the amount of $1,100,000 were purchased. 6. The market value of investments decreased by $5,465. I Required: Prepare journal entries for the above transactions on the books of the City of Arnold Public Safety Employee Retirement Trust Fund. ALTAE NA51 O (Mac)
- 1. A donor contributed $100,000 in cash to Goodwill Industries in 2020. The donor specified that the contribution be held as a permanent endowment, and income from investment of the contribution be used for job training programs. Goodwill Industries invested the $100,000 in securities in 2020. During 2021, investment income of $3,000 was received in cash, and $2,500 was used for job training programs. How does Goodwill Industries report this on its 2021 statement of activities? Select one: A. $3,000 investment income increases net assets without donor restrictions; $2,500 expense decreases net assets without donor restrictions. B. $3,000 investment income increases net assets with donor restrictions; $2,500 net assets released from use restrictions decreases net assets with donor restrictions and increases net assets without donor restrictions; $2,500 expense reduces net assets without donor restrictions. C. $3,000 investment income increases net assets without donor restrictions;…Etling Center for State Government Policy, a nonprofit organization, receives a cash contribution with donor restrictions of $100,000 in fiscal year ended December 31, 2021. Of this amount, $40,000 of restrictions are satisfied in fiscal year ended December 31, 2022. What journal entry would be recorded in 2022 to recognize the satisfaction of the restrictions?Good Charity is a new not-for-profit organization that opened in January 2020. It is funded by government grants and private donations. It prepares its annual financial statements using the deferral method of accounting for contributions and uses only one fund to account for all activities. Required: 1) Prepare all related journal entries for the following transactions for Good Charity for 2020: a) Jan 1: a donor contributes land for a future operations site. Land has a fair value of $32,000. b) Feb 1: A donor contributes $60,000 on the condition that the principal amount be invested in marketable securities and that only the income earned from the investment be spent on operations. Income of $2,000 was earned and received during 2020 on these investments. c) General donations of $85,000 were received during 2020. d) Feb 1: the government gave $80,000 to Good Charity to purchase equipment and furniture with a useful life of 10 years. This was all used to…
- In 2021, OCC Corporation made a charitable donation of $400,000 to the American Red Cross. For the year, OCC reported taxable income of $1,500,000 before deducting any charitable contributions, before deducting its $20,000 dividends-received deduction, and before deducting its $40,000 NOL carryover from last year. Assume the donation is a qualified contribution. a. What amount of the $400,000 donation is OCC allowed to deduct for tax purposes in 2021, what is the carryover to 2022, and when does the carryover expire?In 2022, OCC Corporation made a charitable donation of $400,000 to the International Rescue Committee (a qualifying charity). For the year, OCC reported taxable income of $1,500,000 before deducting any charitable contributions, before deducting its $20,000 dividends-received deduction, and before deducting its $40,000 NOL carryover from last year. Required: a. What amount of the $400,000 donation is OCC allowed to deduct for tax purposes in 2022, what is the carryover to 2023, and when does the carryover expire? b. Assume that in 2023, OCC did not make any charitable donations and that it is allowed to deduct its full charitable contribution carryover, if any, from 2022. What book-tax difference associated with the charitable contributions will OCC report in 2023? Is the difference favorable or unfavorable? Is it permanent or temporary? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B What amount of…In 2022, OCC Corporation made a charitable donation of $400,000 to the International Rescue Committee (a qualifying charity). For the year, OCC reported taxable income of $1,500,000 before deducting any charitable contributions, before deducting its $20,000 dividends-received deduction, and before deducting its $40,000 NOL carryover from last year. Required: a. What amount of the $400,000 donation is OCC, allowed to deduct for tax purposes in 2022, what is the carryover to 2023, and when does the carryover expire? b. Assume that in 2023, OCC did not make any charitable donations and that it is allowed to deduct its full charitable contribution carryover, if any, from 2022. What book-tax difference associated with the charitable contributions will OCC report in 2023? Is the difference favorable or unfavorable? Is it permanent or temporary? Complete this question by entering your answers in the tabs below. Required A Required B What amount of the $400,000 donation is OCC allowed to…