Comparative Journal Entries for a Government Entity and a Voluntary Health and Welfare Organization [AICPA Adapted]
Following are four independent transactions or events that relate to a local government and a voluntary health and welfare organization:
1. A disbursement of $25,000 was made from the general fund unrestricted assets for the cash purchase of new equipment.
2. An unrestricted cash gift of $100,000 was received from a donor.
3. Investments in common stocks with a total carrying value of $50,000 were sold by a permanently restricted endowment fund for $55,000 before any dividends were earned on these stocks. The gain is donor-restricted to remain in the permanently restricted fund.
4. General obligation bonds payable with a face amount of $1,000,000 were sold at par, with the proceeds required to be used solely for construction of a new building. This building was completed at a total cost of $1,000,000, and the total amount of bond issue proceeds was disbursed toward this cost. Disregard interest capitalization.
Required
a. For each of these transactions or events, prepare journal entries without explanations, specifying the affected funds and showing how these transactions or events should be recorded by a local government whose debt is serviced by general tax revenue.
b.For each of these transactions or events, prepare journal entries without explanations, specifying the affected funds and showing how these transactions or events should be recorded by a voluntary health and welfare organization.
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