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- ! Required information Problem 18-45 (Static) (LO 18-1, 18-2, 18-4, 18-5, 18-8) [The following information applies to the questions displayed below.] For a number of years, a private not-for-profit entity has been preparing financial statements that do not necessarily conform to U.S. generally accepted accounting principles. At the end of the most recent year (Year 2), those financial statements show total assets of $900,000, total liabilities of $100,000, net assets without donor restriction of $400,000, and net assets with donor restrictions of $400,000. This last category is composed of $300,000 in net assets with purpose restrictions and $100,000 in net assets that must be permanently held. At the end of Year 1, financial statements show total assets of $700,000, total liabilities of $60,000, net assets without donor restriction of $340,000, and net assets with donor restrictions of $300,000. This last category is composed of $220,000 in net assets with purpose restrictions and…A private not-for-profit entity receives two gifts. One is $80,000 and is restricted for paying salaries of teachers who help children learn to read. The other is $110,000, which is restricted for purchasing playground equipment. Both amounts are properly spent by the end of this year. Because the purchase of the playground equipment was made at the end of the year, the organization records no depreciation this period. It has elected to view the equipment as having a time restriction. On the statement of activities, what is reported for unrestricted net assets? An increase of $80,000 and a decrease of $80,000. An increase of $190,000 and a decrease of $190,000. An increase of $190,000 and a decrease of $80,000. An increase of $80,000 and no decrease.A private not-for-profit entity receives two gifts. One is $80,000 and is restricted for paying salaries of teachers who help children learn to read. The other is $110,000, which is restricted for purchasing playground equipment. Both amounts are properly spent by the end of this year. Because the purchase of the playground equipment was made at the end of the year, the organization records no depreciation this period. It has elected to view the equipment as having a time restriction. On the statement of activities, what is reported for unrestricted net assets?a. An increase of $80,000 and a decrease of $80,000.b. An increase of $190,000 and a decrease of $190,000.c. An increase of $190,000 and a decrease of $80,000.d. An increase of $80,000 and no decrease
- A private not-for-profit entity is working to create a cure for a deadly disease. The charity starts the year with cash of $709,000. Of this amount, unrestricted net assets total $403,000, temporaril restricted net assets total $203,000, and permanenetly restricted net assets total $103,000. Within the temporarily restricted net assets, the entity must use 80 percent for equipment and the rest for salaries . No implied time restriction has been designated for the equipment when purchased. For the permanently restricted net assets, 70 percent of resulting income must be used to cover the purchase of advertising for fund-raising purposes and the rest is unrestricted. During the current year, the organization has the following transactions: 1. Received unrestricted cash gifts of $213,000. 2. Paid salaries of $83,000 with $23,000 of that amount coming from restricted funds. Of the total salaries, 40 percent is for administrative personnel and the remainder is evenly divided among…On Jan 1, 2020 Charity Co., a not-for-profit organization, had an anonymous donor donate land with a fair value of $40 as well as machinery valued at $100. The machinery has a useful life of six years. Charity has a Dec 31 year end. Required: 1)Assuming that the restricted fund method of accounting for contributions is used and the organization has a general fund and a capital fund. a) Prepare the necessary 2020 journal entries to record the 2020 transactions noted above. b) Indicate the effect of the transactions on 2020 excess of revenue over expenses. 2) Repeat (a) & (b) above assuming instead that the deferral method of accounting for contributions is used and the organization does not use fund accounting.70. On December 31, Year 3, Dahlia, a non- governmental not-for-profit organization, purchased a vehicle with $15,000 unrestricted cash and received a donated second vehicle having a fair value of $12,000. Dahlia expects each vehicle to provide it with equal service value over each of the next five years and then to have no residual value. Dahlia has an accounting policy implying a time restriction on gifts of long-lived assets. In Dahlia's Year 4 state- ment of activities, what depreciation expense should be included under changes in unrestricted net assets? a. $0 b. $2,400 c. $3,000 d. $5,400 71. Home Care, Inc., a nongovernmental voluntary health and welfare organization, received two contri- butions in Year 3. One contribution of $250,000 was restricted for use as general support in Year 4. The other contribution of $200,000 carried no donor re- strictions. What amount should Home Care report as temporarily restricted contributions in its Year 3 statement of activities. a. $450,000…
- A private not-for-profit entity is working to create a cure for a deadly disease. The charity starts the year with cash of $700,000. Of this amount, unrestricted net assets total $400,000, temporarily restricted net assets total $200,000, and permanently restricted net assets total $100,000. Within the temporarily restricted net assets, the entity must use 80 percent for equipment and the rest for salaries. No implied time restriction has been designated for the equipment when purchased. For the permanently restricted net assets, 70 percent of resulting income must be used to cover the purchase of advertising for fund-raising purposes and the rest is unrestricted. During the current year, the organization has the following transactions: Received unrestricted cash gifts of $210,000. Paid salaries of $80,000 with $20,000 of that amount coming from restricted funds. Of the total salaries, 40 percent is for administrative personnel and the remainder is evenly divided among individuals…A private not-for-profit entity is working to create a cure for a deadly disease. The charity starts the year with cash of $700,000. Of this amount, unrestricted net assets total $400,000, temporarily restricted net assets total $200,000, and permanently restricted net assets total $100,000. Within the temporarily restricted net assets, the entity must use 80 percent for equipment and the rest for salaries. No implied time restriction has been designated for the equipment when purchased. For the permanently restricted net assets, 70 percent of resulting income must be used to cover the purchase of advertising for fund-raising purposes and the rest is unrestricted.During the current year, the organization has the following transactions:∙ Received unrestricted cash gifts of $210,000.∙ Paid salaries of $80,000 with $20,000 of that amount coming from restricted funds. Of the total salaries, 40 percent is for administrative personnel and the remainder is evenly divided among individuals…A private not-for-profit entity receives three large cash donations: *One gift of $85,000 is restricted by the donor so that it can't be spent for four years *One gift of $105,000 is restricted to pay the salaries of the entity's workers *One gift of $135,000 must be held forever with the income to be used to provide food for needy families. In the current year, income of $25,000 was earned by not spent. WHat is the increase in the current year in net assets with donor restrictions? 220,000 240,000 350,000
- The following selected transactions occurred for a nongovernmental, not-for-profit organization. 1. Received a contribution of stock to establish an endowment fund. The income from the endowment is unrestricted. The donor had acquired the stock for $23 about 20 years earlier. Its estimated fair value when donated was $250. 2. Pledges receivable at year end were $100, all from pledges received during the year. The pledges are unrestricted and 5% of the pledges are estimated to be uncollectible. The pledges expect to be collected early next year. For questions 3-5, assume that the organization has adopted a policy that restrictions on donations made for capital purposes are met when the capital item is purchased. A cash gift of $200 was received restricted for the purchase of equipment. Equipment of $80 was purchased from the gift restricted for this purpose. Depreciation expense for the year on the equipment purchased is $10. Required: Prepare the journal entries for the above…In the current year, the not-for-profit organization Save the Butterflies Foundation received cash of $500 to be used as the Foundation wishes and $1,000 to be used for butterfly research. Save the Butterflies also received pledges of $700 that it can use as it wishes and $600 for its building fund. All pledges are expected to be received next year. How much would Save the Butterflies report as contributions with donor restrictions in the current year? 4 O $1,600. O $1,000. O $2,300. O $1,300.Aquamarine Corporation, a calendar year C corporation, makes the following donations to qualified charitable organizations during the current year: Painting: The amount of the contribution is Stock: The amount of the contribution is Groceries: The amount of the contribution is Adjusted Basis $6,000 $10,000 Painting held four years as an investment, to a church, which sold it immediately Apple stock held two years as an investment, to United Way, which sold it immediately Canned groceries held one month as inventory, to Catholic Meals for the Poor 15,750 35,000 7,800 13,000 Determine the amount of Aquamarine Corporation's charitable deduction for the current year. (Ignore the taxable income limitation.) Therefore, the total charitable contribution is $ Fair Market Value