A private not-for-profit entity receives three large cash donations:One gift of $70,000 is unrestricted.One gift of $90,000 is restricted to pay the salary of the organization’s workers.One gift of $120,000 is restricted forever with the income to be used to provide food for needy families.Which of the following statements is not true? Choose the correct.a. Temporarily restricted net assets have increased by $90,000.b. Permanently restricted net assets have increased by $210,000.c. When the donated money is spent for salaries, unrestricted net assets will increase and decrease by the same amount.d. When the donated money is spent for salaries, temporarily restricted net assets will decrease.

A private not-for-profit entity receives three large cash donations:One gift of $70,000 is unrestricted.One gift of $90,000 is restricted to pay the salary of the organization’s workers.One gift of $120,000 is restricted forever with the income to be used to provide food for needy families.Which of the following statements is not true? Choose the correct.a. Temporarily restricted net assets have increased by $90,000.b. Permanently restricted net assets have increased by $210,000.c. When the donated money is spent for salaries, unrestricted net assets will increase and decrease by the same amount.d. When the donated money is spent for salaries, temporarily restricted net assets will decrease.

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter28: Income Taxation Of Trusts And Estates

Section: Chapter Questions

Problem 9DQ

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A private not-for-profit entity receives three large cash donations: One gift of $70,000 is unrestricted. One gift of $90,000 is restricted to pay the salary of the organization’s workers. One gift of $120,000 is restricted forever with the income to be used to provide food for needy families. Which of the following statements is not ture? Temporarily restricted net assets have increased by $90,000. Permanently restricted net assets have increased by $210,000. When the donated money is spent for salaries, unrestricted net assets will increase and decrease by the same amount. When the donated money is spent for salaries, temporarily restricted net assets will decrease.
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
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 $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…
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.