47. Which one of the following is a voluntary health and welfare organization? a. Charity raising money for underprivileged chil- dren. b. Nursing Home c. Clinic d. Hospital 48. A private not-for-profit performing arts center receives the following three donations: A gift of $90,000 which is unrestricted. A gift of $125,000 restricted for payment of sala- ries. A gift of $200,000 that is restricted forever but the income from the gift may be used for current expenditures. Which of the following is not true? a. Temporarily restricted net assets increased by $125,000. b. Permanently restricted net assets increased by $325,000. c. When the money is spent for salaries, unrestricted net assets increase and decrease by the same amount. d. When the money is spent for salaries, temporarily

47. Which one of the following is a voluntary health and welfare organization? a. Charity raising money for underprivileged chil- dren. b. Nursing Home c. Clinic d. Hospital 48. A private not-for-profit performing arts center receives the following three donations: A gift of $90,000 which is unrestricted. A gift of $125,000 restricted for payment of sala- ries. A gift of $200,000 that is restricted forever but the income from the gift may be used for current expenditures. Which of the following is not true? a. Temporarily restricted net assets increased by $125,000. b. Permanently restricted net assets increased by $325,000. c. When the money is spent for salaries, unrestricted net assets increase and decrease by the same amount. d. When the money is spent for salaries, temporarily

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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To send a mailing, a private not-for-profit charity spends $100,000. The mailing solicits donations and provides educational and other information about the charity. Which of the following is true? Choose the correct.a. No part of the $100,000 can be reported as a program service expense.b. Some part of the $100,000 must be reported as a program service expense.c. No authoritative guidance exists, so the organization can allocate the cost as it believes best.d. Under certain specified circumstances, the organization should allocate a portion of the $100,000 to program service expenses.
A voluntary health and welfare entity sends a mailing to all of its members including those who have donated in the past and others who have never donated. The mailing, which had a total cost of $22,000, asks for monetary contributions to help achieve the charity’s stated mission. In addition, 80 percent of the material included in the mailing is educational in nature, providing data about the entity’s goals. Which of the following is true? Choose the correct.a. Some part of the $22,000 should be reported as a program service cost because of the educa-tional materials included.b. No part of the $22,000 should be reported as a program service cost because there is no specific call to action.c. No part of the $22,000 should be reported as a program service cost because the mailing was sent to both previous donors and individuals who have not made donations.d. Some part of the $22,000 should be reported as a program service cost because more than 50 percent of the material was educational…
A voluntary health and welfare entity sends a mailing to all of its members including those who have donated in the past and others who have never donated. The mailing, which had a total cost of $22,000, asks for monetary contributions to help achieve the charity’s stated mission. In addition, 80 percent of the material included in the mailing is educational in nature, providing data about the entity’s goals. Which of the following is true? Some part of the $22,000 should be reported as a program service cost because of the educational materials included. No part of the $22,000 should be reported as a program service cost because there is no specific call to action. No part of the $22,000 should be reported as a program service cost because the mailing was sent to both previous donors and individuals who have not made donations. Some part of the $22,000 should be reported as a program service cost because more than 50 percent of the material was educational in nature.
To send a mailing, a private not-for-profit charity spends $100,000. The mailing solicits donations and provides educational and other information about the charity. Which of the following is true? No part of the $100,000 can be reported as a program service expense. Some part of the $100,000 must be reported as a program service expense. No authoritative guidance exists, so the organization can allocate the cost as it believes best. Under certain specified circumstances, the organization should allocate a portion of the $100,000 to program service expenses.
A voluntary health and welfare entity receives $32,000 in cash from solicitations made in the local community. The charity receives an additional $1,500 from members in payment of annual dues. Members are assumed to receive benefits approximately equal in value to the amount of dues paid. How should this money be recorded? Choose the correct.a. Revenues of $33,500.b. Public support of $33,500.c. Public support of $32,000 and a $1,500 increase in the fund balance.d. Public support of $32,000 and revenue of $1,500.
A voluntary health and welfare entity receives a gift of new furniture having a fair value of $2,100. The group then gives the furniture to needy families following a flood. How should the charity record receipt and distribution of this donation? Make no entry. Record contributed support of $2,100 and community assistance expense of $2,100. Recognize revenue of $2,100. Recognize contributed support of $2,100 and community expenditures of $2,100.
Seniors Moving, a non-profit, had the following: contributions of $200,000; stamps and paper to send to donors to request more money, $20,000; salaries for case works that help senior citizens (for Seniors Moving's mission), $150,000; various gifts to donors, $30,000. What amount would be program expenses? Would Senior Movers have to show information in a separate statement of functional expenses (yes), or could show program/support in another report (No)? 1. 200,000, Yes 2. 150,000, No 3. 200,000, No 4. 150,000, Yes
The Let's Read organization is a public charity under Internal Revenue Code IRS section 501(c)(3). It had a total support of the following. 1. United way support $10,000 2.Grant from state. $25,000 3. Grant from city $10,000 4. Contribution from individuals $261,000 5. Investment income. $1,000 6. Revenue from sales of books $12,000 Total =$319,000 Of the $261,000 received from contributors, $240,000 came from four contributors, each giving $60,000, the other $21,000 came from small individual contributions. Respond to the following. 1. Calculate the total amount of support that qualifies as public support in meeting the public test to escape private foundation status. 2. Is the organization considered a public charity ?why? 3. If the organization had received $200,000 from one individual and the remaining $61,000 from many small individual contribution, would the not-for-profit…
During the current year, a voluntary health and welfare organization receives $800,000 in unrestricted pledges. Of this amount, $300,000 has been designated by donors for use next year to support operations in the pharmacy. what amount of unrestricted support should the organizations recognize in its current-year financial statements? A.) $800,000 B.) $700,000 C.) $500,000 D.) $400,000
Urban Hospice (UH) is a not-for-profit organization. It receives some funding from the government, but most of its funding comes from donations and bequests. It uses the deferral method to account for contributions and an encumbrance system to control expenditures. For simplicity, UH accounts for all of its activities through an operations fund. UH has provided the following selected transactions for the current year: a. At the beginning of the year, UH unexpectedly received $1,000,000 from the government to purchase three monitoring machines. UH immediately purchased the machines. Since UH purchased the machines as soon as the funds were received, it did not prepare a purchase order for them. At the end of the year, UH took depreciation of $200,000 on the machines. b. UH's annual Christmas fundraising gala generated $3,011,000 in cash and $820,000 in pledges. Based on previous years' experiences, UH estimates that 85 percent of the pledges will be collected in the first three months…
What are the journal entries for the following 14 problems? 1. The hospital received pledges without donor restrictions of $372,6000 and pledges with donor restrictions of $216,000. It collected all of the pledges without donor restrictions and $180,000 of the pledges with donor restrictions. 2. Cash gifts designated by donors for juvenile diabetes research amounted to $250,000 for the year. During the year, $000,000 was expended for juvenile diabetes research. 3. The total services provided by the hospital to all patients during the year amounted to $1,270,697 at the hospital’s established billing rates. Based on the rates with third-party payers, the hospital expects to collect approximately $889,488 (70 percent) of this amount. Due to current economic conditions, it expects that $113,423 (15 percent of the 70 percent) will have to be written off as bad debts. 4. It also provided $93,600 in charity care, which it never expected to collect. 5. It collected $864,225 in patient accounts…
Theresa Johnson does volunteer work for a local not-for-profit entity as a community service. She replaces without charge an administrator who would have otherwise been paid $31,000. Which of the following statements is true? Choose the correct.a. The charity should recognize a restricted gain of $31,000.b. The charity should recognize a contribution of $31,000 as an increase in unrestricted net assets as well as salary expense of $31,000.c. The charity should recognize a reduction in expenses of $31,000.d. The charity should make no entry.