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?
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- Answer both i and ii. please answer asap Assume instead that Good Charity prepares its annual financial statements using the restricted fund method of accounting for contributions and has chosen to have a general, capital and endowment fund to account for its activities. Jan 1: a donor contributes land for a future operations site. Land has a fair value of $32,000. Feb 1: A donor contributes $60,000 on the condition that the principal amount be invested in marketable securities and that only the income earned from the investment be spent on operations. Income of $2,000 was earned and received during 2020 on these investments. General donations of $85,000 were received during 2020. d) Feb 1: the government gave $80,000 to Good Charity to purchase equipment and furniture with a useful life of 10 years. This was all used to purchase $100,000 of equipment and furniture on July 1, 2020 and the operation opened in a rented facility on July 2, 2020. e) Costs of $72,000 were incurred…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. ZeroHow 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 ?
- 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 2420000.18 Government expenditure includes all public consumption, investment, and transfer payment. Which of the following is categorized under current expenditure? i. Purchases of hospital equipment. ii. Salary payment for teachers of private schools. iii. Grant for research and development (R&D) activities. iv. Social security payments for the unemployed. i only i and ii i, ii and iii i, ii, iii and iv2. In accordance with ASC 958, contributions of services are recognized as increases in net assets without donor restrictions by a private, not for profit entity if which of the following criteria are satisfied? The services received create or enhance nonfinancial assets. The services require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donations The services will be performed within the current fiscal year. A) I or II B) I or III C) II or II D) I, II, III
- Answer all the both the questions 1 and 2 along with the subparts i,ii,iii Good Charity is a new not-for-profit organization that opened in January 2020. It is funded by government grants and private donations. It prepares its annual financial statements using the deferral method of accounting for contributions and uses only one fund to account for all activities. Required: Prepare all related journal entries for the following transactions for Good Charity for 2020: Jan 1: a donor contributes land for a future operations site. Land has a fair value of $32,000. Feb 1: A donor contributes $60,000 on the condition that the principal amount be invested in marketable securities and that only the income earned from the investment be spent on operations. Income of $2,000 was earned and received during 2020 on these investments. General donations of $85,000 were received during 2020. d) Feb 1: the government gave $80,000 to Good Charity to purchase equipment and furniture with a…Which of the following statements is true?a. All not-for-profit organizations must include a statement of functional expenses.b. Donor-restricted contributions whose restrictions have been met in the reporting period may be reported as unrestricted support.c. Statements should focus on the individual unrestricted and restricted funds of the organization.d. FASB ASC 958-605 contains requirements that are generally more stringent than those relating to for-profit organizations.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?
- 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 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.Which statement below best describes the entities that can accept donations from the public and provide donors with documentation to allow them to claim a tax deduction in respect of their donation? a. A local state school. b. A private hospital. c. Only entities classified as a deductible gift recipient (DGR) as they meet the necessary requirements to be registered by the ATO. d. Any not for profit organisation.