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Income Tax Fundamentals 2020

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter5: Deductions For And From Agi

Section: Chapter Questions

Problem 27MCQ

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A donor gives the organization a cash contribution to be used for expanding the organizations food pantry program.

Is this change in net assets with or without donor restrictions?

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A private not-for-profit entity sends a direct mail solicitation for monetary donations. Other information is included with the mailing. Under what conditions can the organization report part of the cost of this mailing as a program service cost rather than as purely a fund-raising cost?
The organization sells goods from its online bookstore. Is this change in net assets with or without donor restrictions?
Determine the amount of revenue recognized for each of the following items and whether the revenue would be classified as net assets with donor restrictions or net assets without donor restrictions. 1. 77000 of promises to give to program activities. 2. 675000, services are donated that meet the recognition of services definition. 3. 274000 cash received. Restricted to 52000 for scholarships and the rest for acquisition of capital project. 4. 572000 of unconditional promises to give to support activities. 5. A donor contributes 729000 cash to set up a donor‐restricted endowment fund. The income is restricted to support program purposes. 6. A donor contributes cash to set up an annuity trust with a present value of 742000. Net assets with donor restrictions is 649000 Net assets without donor restrictions is 2420000.
A charitable organization relies for its funding on donations from the general public, which is mainly in the form of cash collected in the streets by volunteers and cheques sent by post to the charity's head office. Wealthy individuals occasionally provide large donations, sometimes on condition that the money is used for specific purpose. The constitution of the charity specifies the purpose of the charity, and also states that no more than 15% of the charity's income each year may be spent on administration costs. Required Identify the inherent risks for this charitable organization that an auditor of its financial statements would need to consider.
A charitable organization relies for its funding on donations from the general public, which is mainly in the form of cash collected in the streets by volunteers and cheques sent by post to the charity’s head office. Wealthy individuals occasionally provide large donations, sometimes on condition that the money is used for specific purpose. The constitution of the charity specifies the purpose of the charity, and also states that no more than 15% of the charity’s income each year may be spent on administration costs.Identify the inherent risks for this charitable organization that an auditor of its financial statements would need to consider.
The board of directors of Earth Rock's!, a nonprofit organization focused on environmental protection, hypothesizes that individuals are more likely to donate if they see evidence that their donations are used primarily for program activities rather than administrative and fund-raising costs. To get a sense of how its own cost structure compares to other groups, the board decides to benchmark the financial performance of Earth Rocks! against several other environmental organizations. The data for Earth Rocks! and the other environmental organizations appear below Program Expenditures Fund-raising Costs Administrative Costs Total Costs Earth Rocks 374,900 98,000 121,400 594,300 Weed Lovers 421,000 104,300 98,350 623,650 Flora and Fauna 353,000 97,600 71,840 522,840 Leaf It Be 501,900 89,000 109,750 700,650 Nature's Gift 455,470 71,000 82,450 608,920 Use these data to benchmark Earth Rocks! against the other environmental organizations. How does Earth Rocks! compare to…
How does a voluntary health and welfare organization account for donated goods and cash contributed for operating purposes ? What types of revenues are recognized by voluntary health and welfare organizations ?
An NFP organization receives supplies from a donor. At what amount is the donation reported in contribution revenue? Select one: A. The donor's cost B. Fair value at the date of donation C. Fair value at year-end D. Zero
Donations in cash are easy to measure. What is the treatment that not-for-profit organizations use for the contribution of non finacancial assets?
1. Explain with examples the differences between grants and donations? 2. Explain with examples the FASB and GASB treatment of grants? 3. Be specific in providing your explanation with examples. 4. Explain with a couple of examples on not-for-profit organizations' issues with cash donations? 5. Be specific in providing your explanation with examples.
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.
For the following situations determine the fund or nonfund account best suited to account for it. A fund or nonfund account may be used more than once SITUATIONS: GOB grant proceeds received for construction of a new elementary school building – Capital Projects Fund Municipal electric utility bonds to be repaid from customer charges – Debt Service Fund General obligation bonds issued to finance construction of a new elementary school building – Investment Trust Funds Activities of a central print shop that provides custom printing services to all campus departments – Enterprise Funds Financial resources set aside to service the principal and interest on general obligation debt A special hotel occupancy sales tax that can only be used for city economic development promotional activities Financial resources legally restricted to the extent that only earnings, and not the principal, may be used to benefit the government or its citizenry – Special Revenue Fund…

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