Entries for Voluntary Health and Welfare Organizations
The following are the 20X2 transactions of the Midwest Heart Association, which has the following funds and fund balances on January 1, 20X2:
Unrestricted net assets | $281,000 |
Temporarily restricted net assets | 87,000 |
Permanently restricted (endowment) net assets | 219,000 |
1. Unrestricted pledges total $700,000, of which $150,000 is for 20X3. Uncollectible pledges are estimated at 8 percent.
2. Restricted use grants total $150,000.
3. A total of $520,000 of current pledges is collected, and $30,000 of remaining uncollected current pledges is written off.
4. Office equipment is purchased for $15,000.
5. Unrestricted funds are used to pay the $3,000 mortgage payment due on the buildings.
6. Interest and dividends received are $27,200 on unrestricted investments and $5,400 on tem porarily restricted investments. An endowment investment with a recorded value of $5,000 i sold for $6,000, resulting in a realized transaction gain of $1,000. A donor-imposed restrictioi specified that gains on sales of endowment investments must be maintained in the permanentl restricted endowment fund.
7. Depreciation is recorded and allocated as follows:
Community services | $12,000 |
Public health education | 7,000 |
Research | 10,000 |
Fund-raising | 15,000 |
General and administrative | 9,000 |
8. Other operating costs of the unrestricted current fund are
Community services | $250,600 |
Public health education | 100,000 |
Research | 81,000 |
Fund-raising | 39,000 |
General and administrative | 61,000 |
9. Clerical services donated during the fund drive total $2,400. These are not part of the expenses reported in item 8. It has been determined that these donated services should be recorded.
Required
a. Prepare journal entries for the transactions in 20X2.
b.Prepare a statement of activities for 20X2.
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