Question

CHAPTER 10 Reporting the Results of Operations: The Activity 10-17. Use Problems 10-15 and 10-16 to prepare an activity state
10. Puy 10-15. The American Research Council for Humanities (ARCH) had the following financial events during the current year
ARCH has budgeted to sell the books $100,000 total ordered on February 4 October 15. The partitions ordered on arrived, and A
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Answer #1

SOLUTION:

Activity statement:

Revenues and support

Donation revenue

$80,000.00

Sales revenue

$110,000.00

Total revenues & support

$190,000.00

Expenses:

Grant Expense

$50,000.00

COGS

$58,000.00

Wage expense

$90,000.00

Interest expense

$3,000.00

Bad debts

$2,000.00

Depr.

$40,000.00

Total expenses

$243,000.00

Decrease in net assets

-$53,000.00

 

Statement of Financial Position:

Assets

Liabilities & Net Assets

Year 2

Year 1

Year 2

Year 1

Current assets

Liabilities

Cash

$335,000.00

$10,000.00

Current liabilities

A/R, net of estimated uncollectibles of $2,000 in Year 2

$36,000.00

$26,000.00

Accounts payable

$27,000.00

$27,000.00

Wages payable

$47,000.00

$32,000.00

Total current liabilities

$74,000.00

$59,000.00

Pledges receivable

$50,000.00

$350,000.00

Inventory

$27,000.00

$25,000.00

Long-term liabilities

Total current assets

$448,000.00

$411,000.00

Notes payable

$320,000.00

$270,000.00

Total long-term liabilities

$320,000.00

$270,000.00

Long-term assets

Fixed assets

Total liabilities

$394,000.00

$329,000.00

Buildings & Equipment, net

$325,000.00

$350,000.00

Total long-term assets

$325,000.00

$350,000.00

Net assets

Unrestricted

$249,000.00

$302,000.00

Temporary restricted

$30,000.00

$30,000.00

Permanent restricted

$100,000.00

$100,000.00

Total net assets

$379,000.00

$432,000.00

Total assets

$773,000.00

$761,000.00

Total equities

$773,000.00

$761,000.00

 

Cah flow statement:

Cash flows from operating activities

Decrease in unrestricted net assets

-$53,000.00

Plus: Expenses not requiring cash:

Depreciation

$40,000.00

Bad Debts

$2,000.00

Other adjustments:

Minus: Increase in accounts receivables

-$12,000.00

Plus: Decrease in pledges receivable

$300,000.00

Minus: Increase in inventory

-$2,000.00

Plus: Increase in wages payable

$15,000.00

Net cash from operating activities

$290,000.00

Cash flows from investing activities

Purchase of PPE

-$15,000.00

Net cash used in investing activities

-$15,000.00

Cash flows from financing activities

Borrowing with notes

$50,000.00

Net cash from financing activities

$50,000.00

Net increase/(decrease) in cash

$325,000.00

Cash at the beginning of year

$10,000.00

Cash at the end of year

$335,000.00

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