Chapter 14 – Accounting for Not-for-Profit Organizations
14-21
Ch. 14, Solutions, Exercise 14-21 (Cont’d)
General Problem Information: Recording revenue and expense transactions
14-22.
1. RENT EXPENSE 35,000
2. CASH 335,000
CONTRIBUTIONS RECEIVABLE 100,000
3. SALARIES & BENEFITS EXPENSE 224,560
Chapter 14 – Accounting for Not-for-Profit Organizations
14-22
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Ch. 14, Solutions, Exercise 14-22 (Cont’d)
INVOLVE
GENERAL JOURNAL
Debits Credits
4. CONTRIBUTIONS RECEIVABLE 100,000
5. EQUIPMENT & FURNITURE 21,600
6. TELEPHONE EXPENSE 5,200
PRINTING & POSTAGE EXPENSE 12,000
7. NO TRANSACTION IS RECORDED – NO SPECIALIZED SKILL IS
REQUIRED.
8. PROVISION FOR UNCOLLECTIBLE PLEDGES 10,000
ALLOWANCE FOR UNCOLLECTIBLE PLEDGES—
Chapter 14 – Accounting for Not-for-Profit Organizations
14-23
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consent of McGraw-Hill Education.
Ch. 14, Solutions, Exercise 14-22 (Cont’d)
INVOLVE
GENERAL JOURNAL
Debits Credits
9. PUBLIC HEALTH EDUCATION PROGRAM 105,952
COMMUNITY SERVICE PROGRAM 90,816
MANAGEMENT & GENERAL 60,544
FUND-RAISING 45,408
SALARIES & BENEFITS EXPENSE 224,560
Public Health
Education
Community
Service
Management
& General
Fund-raising
Total
Salary & Benefits Expense
$78,596
$67,368
$44,912
$33,684
$224,560
Rent Expense
12,250
10,500
7,000
5,250
35,000
Telephone Expense
1,820
1,560
1,040
780
5,200
Printing & Postage Expense
4,200
3,600
2,400
1,800
12,000
Utilities
2,905
2,490
1,660
1,245
8,300
Supplies Expense
1,505
1,290
860
645
4,300
Provision for Uncollectible
Pledges
3,500
3,000
2,000
1,500
10,000
Depreciation Expense
1,176
1,008
672
504
3,360
Total
$105,952
$90,816
$60,544
$45,408
$302,720
Chapter 14 – Accounting for Not-for-Profit Organizations
14-24
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consent of McGraw-Hill Education.
Ch. 14, Solutions, Exercise 14-22 (Cont’d)
INVOLVE
GENERAL JOURNAL
Debits Credits
10. NET ASSETS RELEASED—SATISFACTION OF
PURPOSE RESTRICTION—WITH DONOR
11. CONTRIBUTIONS—WITHOUT DONOR RESTRICTIONS 229,600
(trans. 1, 2 and 5)
NET ASSETS WITHOUT DONOR RESTRICTIONS 73,120
PUBLIC HEALTH EDUCATION 105,952
Chapter 14 – Accounting for Not-for-Profit Organizations
14-25
Ch. 14, Solutions, Exercise 14-22 (Cont’d)
INVOLVE
GENERAL JOURNAL
REVENUE & OTHER
SUPPORT:
CONTRIBUTIONS $229,600 $344,260 $573,860
NET ASSETS RELEASED
FROM RESTRICTION
Chapter 14 – Accounting for Not-for-Profit Organizations
14-26
Ch. 14, Solutions, Exercise 14-22 (Cont’d)
c. INVOLVE
STATEMENT OF FINANCIAL POSITION
Chapter 14 – Accounting for Not-for-Profit Organizations
14-27
Ch. 14, Solutions, Exercise 14-22 (Cont’d)
d. INVOLVE
STATEMENT OF CASH FLOWS
ENDING CASH $ 88,240
RECONCILIATION OF CHANGES IN NET ASSETS TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
CHANGE IN NET ASSETS $271,140
ADJUSTMENTS TO RECONCILE CHANGES IN NET ASSETS
Chapter 14 – Accounting for Not-for-Profit Organizations
Ch. 14, Solutions, Exercise 14-22 (Cont’d)
e. INVOLVE
REPORTING OF EXPENSES BY NATURE AND FUNCTION
14-29
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Ch. 14, Solutions (Cont’d)
14-23. (Revised July 2019)
(2) be provided by someone with the specialized skill, and (3) would generally
be purchased by the Art League if not contributed. The problem indicates that
the volunteers are greeting visitors, handling security, and the sales of art
1. CASH 60,730
CONTRIBUTIONS—WITHOUT DONOR
2. CASH 1,955
INVESTMENT INCOME—WITHOUT DONOR
Chapter 14 – Accounting for Not-for-Profit Organizations
14-30
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consent of McGraw-Hill Education.
Ch. 14, Solutions, Exercise 14-23 (Cont’d)
ART LEAGUE
GENERAL JOURNAL
Debits Credits
3. GRANTS RECEIVABLE 5,020
4. RENT EXPENSE 18,000
5. SALARIES & BENEFITS EXPENSE 46,900
UTILITIES EXPENSE 3,080
PRINTING AND POSTAGE EXPENSE 1,310
6. CASH 2,900
SHORT-TERM INVESTMENTS 2,900
EQUIPMENT 2,835
14-31
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consent of McGraw-Hill Education.
7. COMMUNITY ART EDUCATION 825
CASH 825
9. EXHIBITION PROGRAM 21,472
COMMUNITY ART EDUCATION PROGRAM 21,472
MANAGEMENT & GENERAL 17,893
10. PAYABLE TO ARTISTS 9,608
CASH 9,608