Accounting For Governmental & Nonprofit Entities
18th Edition
ISBN: 9781259917059
Author: RECK, Jacqueline L., Lowensohn, Suzanne L., NEELY, Daniel G.
Publisher: Mcgraw-hill Education,
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Chapter 1, Problem 13C
To determine
Write a concise report that explains the manner of the standard changes in the reporting of the three financial statements post the issuance of updates.
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Identify the types of financial statements issued annually by federal agencies.
Compare and contrast them against the financial statements issued by a state government and a for-profit business.
Discuss why there is a difference between the three.
Select one of the following nonprofit organizations:1.The American Accounting Association2.American Red Cross3.United Way4.American Cancer Society5.American Institute of CPAsUse the Annual Report of the organization you have selected to:a. Identify the financial statements that the entity presents and what additional disclosure it presents.b. Analyze how contributions are recognized (contributions revenues).
Does the organization have net assets with restrictions imposed by donors?
What is the nature of the restrictions?
The following information relates to Problems 48 through 53:
For a number of years, a private not-for-profit entity has been preparing financial statements that do not necessarily follow generally accepted accounting principles. At the end of the most recent year (Year 2), those financial statements show total assets of $900,000, total liabilities of $100,000, total unrestricted net assets of $400,000, total temporarily restricted net assets of $300,000, and total permanently restricted net assets of $100,000. In addition, total expenses for the year were $500,000 (shown in unrestricted net assets).
Assume that the entity is a charity that charges its “members” monthly dues totaling $100,000 per year (in both Year 1 and Year 2). However, the members get nothing for their dues. The organization has consistently recorded this amount as an increase in Cash along with an increase in revenues within the unrestricted net assets.
What was the correct amount of unrestricted net assets at the…
Chapter 1 Solutions
Accounting For Governmental & Nonprofit Entities
Ch. 1 - Prob. 1QCh. 1 - Prob. 2QCh. 1 - Prob. 3QCh. 1 - Prob. 4QCh. 1 - Explain the meaning and significance of...Ch. 1 - Prob. 6QCh. 1 - Prob. 7QCh. 1 - What are the three sections of a comprehensive...Ch. 1 - Prob. 9QCh. 1 - Prob. 10Q
Ch. 1 - Prob. 11CCh. 1 - Prob. 12CCh. 1 - Prob. 13CCh. 1 - Prob. 14CCh. 1 - Prob. 16CCh. 1 - Prob. 18EPCh. 1 - Prob. 19.1EPCh. 1 - Prob. 19.2EPCh. 1 - Prob. 19.3EPCh. 1 - Prob. 19.4EPCh. 1 - Prob. 19.5EPCh. 1 - Prob. 19.6EPCh. 1 - Prob. 19.7EPCh. 1 - Prob. 19.8EPCh. 1 - Prob. 19.9EPCh. 1 - The primary reason that not-for-profit (NFP)...Ch. 1 - Matching. (LO1-1, LO1-2, LO1-4, LO1-5) For each...Ch. 1 - Prob. 21EP
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- The independent, nonprofit organization that sets financial accounting and reporting standards for both public- and private-sector businesses that use generally accepted accounting principles (GAAP) in the United States is which of the following? A. Financial Accounting Standards Board (FASB) B. generally accepted accounting principles (GAAP) C. Securities and Exchange Commission (SEC) D. conceptual frameworkarrow_forwardThe following information relates to Problems 48 through 53: For a number of years, a private not-for-profit entity has been preparing financial statements that do not necessarily follow generally accepted accounting principles. At the end of the most recent year (Year 2), those financial statements show total assets of $900,000, total liabilities of $100,000, total unrestricted net assets of $400,000, total temporarily restricted net assets of $300,000, and total permanently restricted net assets of $100,000. In addition, total expenses for the year were $500,000 (shown in unrestricted net assets). Assume that this entity is a private college that charged students $600,000 but then provided $140,000 in financial aid. The $600,000 was reported as a revenue; the $140,000 was shown as an expense. Both amounts were included in the unrestricted net assets. What was the correct amount of unrestricted net assets at the end of the year? What was the correct amount of expenses for the year?arrow_forwardThe following information relates to Problems 48 through 53: For a number of years, a private not-for-profit entity has been preparing financial statements that do not necessarily follow generally accepted accounting principles. At the end of the most recent year (Year 2), those financial statements show total assets of $900,000, total liabilities of $100,000, total unrestricted net assets of $400,000, total temporarily restricted net assets of $300,000, and total permanently restricted net assets of $100,000. In addition, total expenses for the year were $500,000 (shown in unrestricted net assets). On December 25 of Year 2, the entity above received a $40,000 cash gift. The donor specified that the entity hold the money for four months. If, at the end of four months, the donor still wished to do so, the money was to be given to the local Kidney Fund (a separate not-for-profit organization). However, during these four months, the donor could use the money for any other purpose. The…arrow_forward
- The following information relates to Problems 48 through 53: For a number of years, a private not-for-profit entity has been preparing financial statements that do not necessarily follow generally accepted accounting principles. At the end of the most recent year (Year 2), those financial statements show total assets of $900,000, total liabilities of $100,000, total unrestricted net assets of $400,000, total temporarily restricted net assets of $300,000, and total permanently restricted net assets of $100,000. In addition, total expenses for the year were $500,000 (shown in unrestricted net assets). On January 1, Year 2, several supporters of the entity above spent their own money to construct a garage for its vehicles that is worth $70,000. It should last for 10 years and will have no salvage value although no time restriction was assumed. The entity increased its contributed support within the unrestricted net assets by $70,000 and increased its expenses within unrestricted net…arrow_forwardThe following information relates to Problems 48 through 53: For a number of years, a private not-for-profit entity has been preparing financial statements that do not necessarily follow generally accepted accounting principles. At the end of the most recent year (Year 2), those financial statements show total assets of $900,000, total liabilities of $100,000, total unrestricted net assets of $400,000, total temporarily restricted net assets of $300,000, and total permanently restricted net assets of $100,000. In addition, total expenses for the year were $500,000 (shown in unrestricted net assets). At the beginning of Year 1, the entity above received $50,000 in cash as a gift with the stipulation that the money be used to buy a bus. The accountant made the appropriate entry at that time. On the first day of Year 2, the entity spent the $50,000 for the bus, an asset that will last for 10 years and will have no salvage value. Because the money came from an outside donor, entity…arrow_forwardThe following information relates to Problems 48 through 53: For a number of years, a private not-for-profit entity has been preparing financial statements that do not necessarily follow generally accepted accounting principles. At the end of the most recent year (Year 2), those financial statements show total assets of $900,000, total liabilities of $100,000, total unrestricted net assets of $400,000, total temporarily restricted net assets of $300,000, and total permanently restricted net assets of $100,000. In addition, total expenses for the year were $500,000 (shown in unrestricted net assets). During Year 1, the entity above received a gift of $80,000. The donor specified that this money be invested in government bonds with the interest to be used to pay the salaries of the entity’s employees. The gift was recorded as an increase in permanently restricted net assets. It earned interest income of $5,000 during Year 1 and $7,000 during Year 2. The entity reported this interest on…arrow_forward
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