Question

Hello. I need help with parts b) and c) below.

Part b) is the "Statement of Activities." Can you tell me what the correct amount should go into the "red x" that appears (explain please)? Also, can you tell me if I am missing any revenue accounts or expense accounts?

Part c) is the "Statement of Financial Position". Can you tell me what the correct amounts should go into the "red x" that appears (explain please)? Also, can you tell me if I am missing any accounts under assets, liabilities, or net position?

Thanks so much.

[The following information applies to the questions displayed below.]

INVOLVE was incorporated as a not-for-profit voluntary health and welfare organization on January 1, 2020. During the fiscal year ended December 31, 2020, the following transactions occurred.

1. A business donated rent-free office space to the organization that would normally rent for $35,100 a year.
2. A fund drive raised $185,500 in cash and $101,000 in pledges that will be paid within one year. A state government grant of $151,000 was received for program operating costs related to public health education.
3. Salaries and fringe benefits paid during the year amounted to $208,660. At year-end, an additional $16,100 of salaries and fringe benefits were accrued.
4. A donor pledged $101,000 for construction of a new building, payable over five fiscal years, commencing in 2022. The discounted value of the pledge is expected to be $94,360.
5. Office equipment was purchased for $12,100. The useful life of the equipment is estimated to be four years. Office furniture with a fair value of $9,700 was donated by a local office supply company. The furniture has an estimated useful life of 10 years. Furniture and equipment are considered net assets without donor restrictions by INVOLVE.
6. Telephone expense for the year was $5,300, printing and postage expense was $12,100 for the year, utilities for the year were $8,400 and supplies expense was $4,400 for the year. At year-end, an immaterial amount of supplies remained on hand and the balance in accounts payable was $3,700.
7. Volunteers contributed $15,100 of time to help with answering the phones, mailing materials, and various other clerical activities.
8. It is estimated that 80 percent of the pledges made for the 2021 year will be collected. Depreciation expense is recorded for the full year on the assets recorded in item 5.
9. All expenses were allocated to program services and support services in the following percentages: public health education, 40 percent; community service, 20 percent; management and general, 20 percent; and fund-raising, 20 percent.
10. Net assets were released to reflect satisfaction of state grant requirements that the grant resources be used for public health education program purposes.
11. All nominal accounts were closed to the appropriate net asset accounts.

Required

1. Prepare journal entries to record these transactions. Expense transactions should be initially recorded by object classification; in entry 10 expenses will be allocated to functions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Round the intermediate and final answers to the nearest dollar amount.)

Answer is complete and correct. General Journal Credit No A Transaction 01 Debit 35,100 Rent Expense Contributions-Without Donor Restrictions 35,100 02 Contributions Receivable Cash Contributions—Without Donor Restrictions 101,000 336,500 185,500 Contributions—With Donor Restrictions—Program 252,000 C 03 224,760 Salaries and Benefits Expense Cash Salaries and Benefits Payable 208,660 16,100 04 101,000 Contributions Receivable Contributions—With Donor Restrictions—Time Discount on Contributions Receivable 94,360 6,640

2. Prepare a statement of activities for the year ended December 31, 2020. (Amounts to be deducted should be indicated with a minus sign. Round the intermediate and final answers to the nearest dollar amount.)

c. Prepare a statement of financial position for the year ended December 31, 2020. (Round the intermediate and final answers to the nearest dollar amount.)

Answer 1

110 INVOLVE 111 Statement of Activities For the Year Ended December 31,2020 112 Without Donor Restictions With Donor Restrictions Total 113 Revenue and Other Support 114 115 Contributions 230,300 346,360 576,660 (125,702) Net Assets Released from Restriction Satisfaction of Purpose 125,702 116 Total Revenue and Other Support 117 356,002 220,658 576,660 118 Expenses; Public Health Education 119 125,702 125,702 120 Community Service 62,851 62,851 121 Management and General 62,851 62,851 Fund Raising 62,851 122 62,851 Total Expenses 123 314,255 314,255 124 41,747 Increase in Net Assets 220,658 262,405 Beginning Net Assets Ending Net Assets 125 126 262,405 41,747 220,658 127

128 C. Prepare a statement of financial position for the year ended December 31, 2020. 129 130 INVOLVE 131 Statement of Financial Position December 31, 2020 132 133 Assets 134 Cash 89,240 (101000+101000-6640-20200) Contributions Receivable 135 175,160 136 Equipment and Furniture 17,805 (21800-3995) Total Assets 282,205 137 138 Liabilities 139 Accounts Payable 140 3,700 Salaries and Benefits Payable 141 16,100 142 Total Liabilities 19,800 143 Net Assets Without Donor Restrictions 41,747 144 145 With Donor Restritions 220,658 Total Net Assets 146 262,405 Total Liabilities and Net Assets 147 282,205 148 149