(a)
Introduction: FAS 116 establishes standards of
The criteria to be used to determine the accounting for donated services to hospitals, VHWOs and ONPO and the reasons for any differences in the accounting criteria.
(b)
Introduction: FAS 116 establishes standards of financial accounting and reporting for contributions received and contributions made. This Statement also establishes standards for recognizing expirations of restrictions on contributions received and for accounting for collections of works of art, historical treasures, and similar assets
accounting for donations of capital assets by hospitals and whether
(c)
Introduction: FAS 116 establishes standards of financial accounting and reporting for contributions received and contributions made. This Statement also establishes standards for recognizing expirations of restrictions on contributions received and for accounting for collections of works of art, historical treasures, and similar assets
accounting of cash contributions by hospitals, VHWOs and ONPOs
Want to see the full answer?
Check out a sample textbook solutionChapter 19 Solutions
Advanced Financial Accounting
- A nonprofit hospitals revenues and expenses are reported on its statement of activities TRUE or FALSE?arrow_forwardPlease prepare dummy journal entries. 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…arrow_forwardPreparation of financial statements for a not-for-profit organization Following is financial data for the Center for Music and Health Studies, a not-for profit organization investigating the benefits of music in the treatment of illness. Given this information, prepare the statement of activities and the statement of financial position. Without DonorRestrictions With DonorRestrictions Support—contributions $821,780 $301,560 Revenues—investment 36,640 37,500 Net assets, beginning of year 674,480 726,960 Long-term liabilities $276,760 Contributions receivable 247,720 Expenses—support 176,580 Net assets released from restriction 67,560 Cash 189,620 Payables 165,580 Expenses—program 731,780 Investments 196,920 Depreciation expense (of which 80% relates to program expenses and 20% relates to support expenses) 33,900 Property, plant and equipment, net 1,464,740 Instructions: Round answers to the nearest whole number, when applicable. Use a…arrow_forward
- 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 ?arrow_forwardAnswer 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…arrow_forwardDee City’s community hospital, which uses enterprise fund reporting and chooses to follow FASB guidelines, normally includes proceeds from sale of cafeteria meals ina. patient service revenues.b. other operating revenues.c. ancillary service revenues.d. deductions from dietary service expenses.arrow_forward
- A charitable organization relies for its funding on donations from the general public, which is mainly in the form of cash collected in the streets by volunteers and cheques sent by post to the charity's head office. Wealthy individuals occasionally provide large donations, sometimes on condition that the money is used for specific purpose. The constitution of the charity specifies the purpose of the charity, and also states that no more than 15% of the charity's income each year may be spent on administration costs. Required Identify the inherent risks for this charitable organization that an auditor of its financial statements would need to consider.arrow_forwardChoose the correct. The financial reporting for private not-for-profit entities primarily focuses on:a. Basic information for the organization as a whole.b. Standardization of fund information reported.c. Inherent differences of various not-for-profit entities that impact reporting presentations.d. Distinctions between current fund and noncurrent fund presentations.arrow_forwardThe following questions concern the accounting principles and procedures applicable to a private not-for-profit entity. Write answers to each question. What is the difference between revenue and public support? What is the significance of the statement of functional expenses? What accounting process does a private charity use in connection with donated materials? What is the difference in the two types of restricted net assets found in the financial records of a private not-for-profit organization? Under what conditions should the entity record donated services? What is the proper handling of costs associated with direct mail and other solicitations for money that also contain educational materials? A not-for-profit receives a painting. Under what conditions can this painting be judged as a work of art? If it meets the criteria for a work of art, how is the financial reporting of the entity affected?arrow_forward
- 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?arrow_forwardWhich one of the following is a correct statement about the nontax characteristics of a pooled income fund? A)It must pay a fixed dollar amount to the charitable beneficiary annually. B)The principal is distributed to the charitable beneficiary at the end of the noncharitable beneficiary's (or beneficiaries') life (or lives). C)Only the grantor and the charity can be beneficiaries. D)The income beneficiary cannot receive more than 10% of the original principal value per year.arrow_forwardA Voluntary Health & Welfare NFP would include which of the following financial statements in its basic financial statements? Statement of financial position and statement of activities Statement of financial position, statement of activities, and statement of cash flows Statement of financial position, statement of activities, statement of cash flows, and statement of functional expenses Statement of financial position, statement of activities, and statement of functional expenses Choose onearrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education