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SWIM FOR SAFETY Statement of Financlal Position January 1, 2017 Assets $ 500,000 210,000 170,000 590,000 Cash Contributions receivable (net). Investments . Buildings & equipment (net) Total assets $1,470,000 Llabilitles Accounts payable and accrued liabilities. Notes payable.... $ 70,000 620,000 Total liabilities $ 690,000 Net Assets Unrestricted.. $ 420,000 Temporarily restricted Permanently restricted.. 190,000 170,000 Total net assets... $ 780,000 $1,470,000 Total liabilities and net assets. HELP & SAVE Statement of FInancial Position January 1, 2017 Assets $1,600,000 70,000 300,000 Cash Contributions receivable (net). Investments...... Buildings & equipment (net) . 700,000 Total assets... $2,670,000 Llabilitles Accounts payable and accrued liabilities.. Notes payable... Total liabilities. $ 110,000 1,100,000 $1,210,000 Net Assets $1,100,000 Unrestricted.... Temporarily restricted. Permanently restricted. Total net assets... 250,000 110,000 $1,460,000 Total liabilities and net assets. $2,670,000

SWIM FOR SAFETY Statement of Financlal Position January 1, 2017 Assets $ 500,000 210,000 170,000 590,000 Cash Contributions receivable (net). Investments . Buildings & equipment (net) Total assets $1,470,000 Llabilitles Accounts payable and accrued liabilities. Notes payable.... $ 70,000 620,000 Total liabilities $ 690,000 Net Assets Unrestricted.. $ 420,000 Temporarily restricted Permanently restricted.. 190,000 170,000 Total net assets... $ 780,000 $1,470,000 Total liabilities and net assets. HELP & SAVE Statement of FInancial Position January 1, 2017 Assets $1,600,000 70,000 300,000 Cash Contributions receivable (net). Investments...... Buildings & equipment (net) . 700,000 Total assets... $2,670,000 Llabilitles Accounts payable and accrued liabilities.. Notes payable... Total liabilities. $ 110,000 1,100,000 $1,210,000 Net Assets $1,100,000 Unrestricted.... Temporarily restricted. Permanently restricted. Total net assets... 250,000 110,000 $1,460,000 Total liabilities and net assets. $2,670,000

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
Problem 10MC
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Help & Save is a private not-for-profit entity that operates in Kansas. Swim For Safety is a private not-for-profit entity that operates in Missouri. The leaders of these two organizations have decided to combine forces on January 1, 2017, in order to have a bigger impact from their work. They are currently discussing ways by which this combination can be created. Statements of financial position for both charities at that date appear below.

The buildings and equipment reported by Help & Save have a fair value of $900,000. The buildings and equipment reported by Swim For Safety have a fair value of $730,000.

  1. Assume Help & Save pays $1 million in cash from its unrestricted net assets to gain complete control over Swim For Safety. It is not assumed that Swim For Safety will be predominantly supported by contributions and investment income in the future. What balances will appear on the combined balance sheet immediately after control is gained?
  2. Assume Help & Save pays $990,000 in cash from its unrestricted net assets to gain complete control over Swim For Safety. It is assumed that Swim For Safety will be predominantly supported by contributions and investment income in the future. What balances will appear on the combined balance sheet immediately after control is gained?
  3. Assume that these two organizations are combined into a new private not-for-profit entity to be known as Help–Swim–Save. A new governing body will be formed to manage and operate this new organization. What balances will appear on the combined balance sheet immediately after control is gained?
SWIM FOR SAFETY Statement of Financlal Position January 1, 2017 Assets $ 500,000 210,000 170,000 590,000 Cash Contributions receivable (net). Investments . Buildings & equipment (net) Total assets $1,470,000 Llabilitles Accounts payable and accrued liabilities. Notes payable.... $ 70,000 620,000 Total liabilities $ 690,000 Net Assets Unrestricted.. $ 420,000 Temporarily restricted Permanently restricted.. 190,000 170,000 Total net assets... $ 780,000 $1,470,000 Total liabilities and net assets.
Transcribed Image Text:SWIM FOR SAFETY Statement of Financlal Position January 1, 2017 Assets $ 500,000 210,000 170,000 590,000 Cash Contributions receivable (net). Investments . Buildings & equipment (net) Total assets $1,470,000 Llabilitles Accounts payable and accrued liabilities. Notes payable.... $ 70,000 620,000 Total liabilities $ 690,000 Net Assets Unrestricted.. $ 420,000 Temporarily restricted Permanently restricted.. 190,000 170,000 Total net assets... $ 780,000 $1,470,000 Total liabilities and net assets.
HELP & SAVE Statement of FInancial Position January 1, 2017 Assets $1,600,000 70,000 300,000 Cash Contributions receivable (net). Investments...... Buildings & equipment (net) . 700,000 Total assets... $2,670,000 Llabilitles Accounts payable and accrued liabilities.. Notes payable... Total liabilities. $ 110,000 1,100,000 $1,210,000 Net Assets $1,100,000 Unrestricted.... Temporarily restricted. Permanently restricted. Total net assets... 250,000 110,000 $1,460,000 Total liabilities and net assets. $2,670,000
Transcribed Image Text:HELP & SAVE Statement of FInancial Position January 1, 2017 Assets $1,600,000 70,000 300,000 Cash Contributions receivable (net). Investments...... Buildings & equipment (net) . 700,000 Total assets... $2,670,000 Llabilitles Accounts payable and accrued liabilities.. Notes payable... Total liabilities. $ 110,000 1,100,000 $1,210,000 Net Assets $1,100,000 Unrestricted.... Temporarily restricted. Permanently restricted. Total net assets... 250,000 110,000 $1,460,000 Total liabilities and net assets. $2,670,000
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