Select the best answer - AVHWO receives a donation that is restricted to its endowment and another donation that is restricted to use in acquiring a child care center. How should these donations be reported in the year received, assuming neither donation is expended in that year? Donation for Endowment Donation for Child Care Center a. b. c. d. e. Contributions-Temporarily Restricted Deferred Capital Additions Contributions—Unrestricted Capital Additions Deferred Contributions—Permanently Restricted Contributions—Temporarily Restricted Capital Additions Contributions—Unrestricted Capital Additions Contributions—Temporarily Restricted

Select the best answer - AVHWO receives a donation that is restricted to its endowment and another donation that is restricted to use in acquiring a child care center. How should these donations be reported in the year received, assuming neither donation is expended in that year? Donation for Endowment Donation for Child Care Center a. b. c. d. e. Contributions-Temporarily Restricted Deferred Capital Additions Contributions—Unrestricted Capital Additions Deferred Contributions—Permanently Restricted Contributions—Temporarily Restricted Capital Additions Contributions—Unrestricted Capital Additions Contributions—Temporarily Restricted

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter17: Business Tax Credits And The Alternative Minimum Tax

Section: Chapter Questions

Problem 29P

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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…
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Early in 2018, a not-forprofit organization received a $4,000,000 gift from a wealthy benefactor. This benefactor specified that the gift be invested in perpetuity with income restricted to provide speaker fees for a lecture series named for the benefactor. The not-for-profit is permitted to choose suitable investments and is responsible for all other costs associated with initiating and administering this series.Neither the donor’s stipulation nor the law addresses gains and losses on this permanent endowment. In 2018, the investments purchased with the gift earned $100,000 in dividend income. The fair value of the investments increased by $300,000. The not-for-profit’s accounting policy is to record increases in net assets, for which a donor-imposed restriction is met in the same accounting period as gains and investment income are recognized, as increases in unrestricted net assets.Five presentations in the lecture series were held in 2018. The speaker fees for the five…
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