Question

Preparation of not-for-profit journal entries and financial statements Youth Camps, Inc. is a not-for-profit organization that owns a number of summer camps for inner-city children. At the end of last year, the organization reported the following trial balance: DR CR Cash Investments Contributions receivable Property, plant and equipment, net Payables Long-term liabilities Net assets—without donor restrictions Net assets with donor restrictions $333,000 4,440,000 962,000 2,220,000 $740,000 1,480,000 2,960,000 2,775,000 $7,955,000 $7,955,000 The investments are allocated as follows: 40% are unrestricted, 60% are donor restricted. Investment income (paid in cash) is 5% for the current year. During the year, the organization received $5,180,000 in donations without donor restrictions and $518,000 in donations with donor restrictions. All of these donations are on account. In addition, it recognized program expenses of $4,810,000 and expenses relating to support of $684,500, both on account. Of the program expenses, $370,000 is spent using net assets with donor restrictions for approved purposes, thus receiving the appropriate release from the donors' restrictions. Youth Camps collected $5,550,000 of contributions receivable, paid $5,365,000 of payables, and purchased additional land in the amount of $240,500 (depreciation expense of $166,500 allocated 90% to program expenses and 10% to support expenses). Interest expense on the long-term debt is included in the expenses referenced above, and no rep of the principal is recognized during the year.

Answer 1

Particulars	Debit	Credit
Cash                       A/c             Dr	222000
To revenue - Investment (without donor restrictions)		88800
To revenue – Investment (with donor restriction)		133200
Being interest on investments received in cash accounted
Contributions receivable                 A/c                 Dr	5698000
To Support - contributions (without donor restrictions)		5180000
To support – contributions (with donor restrictions)		518000
Being contributions received on account has been accounted for
Program expenses                     A/c                         Dr	4440000
Support expenses                      A/c                          Dr	684500
To payables A/c		5124500
Being program and support expenses accounted for
Program expenses                       A/c                      Dr	370000
To Net assets with donor restrictions		370000
Being program expenses paid using net assets with donor restrictions has been accounted for
Cash                                     A/c                       Dr	5550000
To Contributions receivable A/c		5550000
Being cash received accounted for
Payables                              A/c                       Dr	5365000
To cash                            A/c		5365000
Being cash paid accounted for
Property plant and equipment            A/c            Dr	240500
To cash                                 A/c		240500
Being land purchased accounted for
Depreciation                  A/c                    Dr	166500
To Property plant and equipment A/c		166500
Being depreciation for the current year accounted for

Statement of activities
Particulars	Without donor restrictions	With donor restrictions	Total
Support – contributions	$       5180000	$     518000	$   5698000
Revenues – Investment	88800	133200	222000
Net asset released from restrictions		370000	370000
Total support and revenue	5268800	1021200	6290000
Expenses – Program	4589850	370000	4959850
Expenses – Support	684500
Total expenses	5274350	370000	5644350
Change in net assets	(5550)	651200	645650
Net assets beginning of the year	2960000	2775000	5735000
Net assets end of the year	2954450	2123800	5078250

Statement of financial position
Particulars	Amount
Cash	499500
Investments	4440000
Contribution receivable	1110000
Total current assets	6049500
Property plant and equipment net	2294000
Total assets	8343500
Payables	869500
Total current liabilities	869500
Long term liabilities	1480000
Total liabilities	1979500
Net assets without donor restri Particulars Debit Credit Cash                       A/c             Dr 222000      To revenue - Investment (without donor restrictions) 88800      To revenue – Investment (with donor restriction) 133200 Being interest on investments received in cash accounted Contributions receivable                 A/c                 Dr 5698000       To Support - contributions (without donor restrictions) 5180000        To support – contributions (with donor restrictions) 518000 Being contributions received on account has been accounted for Program expenses                     A/c                         Dr 4440000 Support expenses                      A/c                          Dr 684500        To payables A/c 5124500 Being program and support expenses accounted for Program expenses                       A/c                      Dr 370000        To Net assets with donor restrictions 370000 Being program expenses paid using net assets with donor restrictions has been accounted for Cash                                     A/c                       Dr 5550000       To Contributions receivable A/c 5550000 Being cash received accounted for Payables                              A/c                       Dr 5365000        To cash                            A/c 5365000 Being cash paid accounted for Property plant and equipment            A/c            Dr 240500       To cash                                 A/c 240500 Being land purchased accounted for Depreciation                  A/c                    Dr 166500        To Property plant and equipment A/c 166500 Being depreciation for the current year accounted for Statement of activities Particulars Without donor restrictions With donor restrictions Total Support – contributions $       5180000 $     518000 $   5698000 Revenues – Investment              88800         133200      222000 Net asset released from restrictions         370000       370000 Total support and revenue         5268800       1021200     6290000 Expenses – Program          4589850       370000      4959850 Expenses – Support           684500 Total expenses        5274350       370000       5644350 Change in net assets         (5550)       651200 645650 Net assets beginning of the year    2960000 2775000     5735000 Net assets end of the year       2954450       2123800     5078250 Statement of financial position Particulars Amount Cash 499500 Investments 4440000 Contribution receivable 1110000 Total current assets 6049500 Property plant and equipment net 2294000 Total assets 8343500 Payables 869500 Total current liabilities 869500 Long term liabilities 1480000 Total liabilities 1979500 Net assets without donor restrictions 2960000 Net assets with donor restrictions 2405000 Total net assets 5365000 Total liabilities and net assets 7344500 ctions	2960000
Net assets with donor restrictions	2405000
Total net assets	5365000
Total liabilities and net assets	7344500