At the beginning of the year, Omni Direction Health Services, a Health and welfare not-for-profit entity, had the following Net Assets balances: Net Assets: without donor restriction $980,000 with donor restriction       $320,000 During the year a number of transactions occured. Using a 2-column schedule, show how each of the following transactions would affect the organization's two categories of Net assets. Show any reclassification necessary. Number each entry on your schedule to match the numbering below and provide a final total.    2. Paid salaries of $30,000 with $5,000 of that amount coming from restricted funds.   note: two separate things should be recorded. One, there is a reduction (you show an addition) of 30,000 to net assets without donor restrictions because of the salaries expense. Then, there is a reclassification that reduces net assets with donor restrictions and increases net assets without donor restrictions because some previous donation has been used as the donor required -- to pay salaries.

SWFT Comprehensive Volume 2019
42nd Edition
ISBN:9780357233306
Author:Maloney
Publisher:Maloney
Chapter28: Income Taxati On Of Trusts And Estates
Section: Chapter Questions
Problem 9DQ
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At the beginning of the year, Omni Direction Health Services, a Health and welfare not-for-profit entity, had the following Net Assets balances:

Net Assets:

without donor restriction $980,000

with donor restriction       $320,000

During the year a number of transactions occured. Using a 2-column schedule, show how each of the following transactions would affect the organization's two categories of Net assets. Show any reclassification necessary. Number each entry on your schedule to match the numbering below and provide a final total. 

 

2. Paid salaries of $30,000 with $5,000 of that amount coming from restricted funds.

 

note:

two separate things should be recorded. One, there is a reduction (you show an addition) of 30,000 to net assets without donor restrictions because of the salaries expense. Then, there is a reclassification that reduces net assets with donor restrictions and increases net assets without donor restrictions because some previous donation has been used as the donor required -- to pay salaries.
 
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