Chapter 14, Problem 20EP

Statement of Activities. (LO14-3) The Atkins Museum recently hired a new controller. His experience with managerial accounting and strong communication skills were extremely attractive. The new controller sent each member of the Board of Trustees’ Finance Committee a set of the financial statements one week before the monthly meeting for their review. The set included the following statement of activities.

Other information: The management and general expenses are first allocated to the programs to which they directly relate; for example, the executive director’s salary is allocated to the Public Exhibit Program according to the percentage of time spent working on the program. Remaining unallocated management and general expenses are allocated to the programs as indirect costs based on the relative amount of salaries and wages to total salaries and wages for the programs.

Required

As a member of The Atkins Museum’s Board of Directors Finance Committee, review this statement and answer the following questions:

1. a.      Is the statement in proper form according to FASB standards?
2. b.      What questions do you have for the controller?
3. c.       The Atkins Museum would like to open an Impressionists exhibit. If its operating expenses are expected to be similar to those of the Abstract Exhibit, how much should the organization solicit in contributions or grants to cover the full cost of the program?
4. d.      If you were a potential contributor to the Atkins Museum, do you think you have enough information from this statement on which to base your decision to donate?