homework problems
Started on Monday, 24 April 2023, 7:01 PM State Finished Completed on Monday, 24 April 2023, 8:13 PM Time taken 1 hour 12 mins Grade 84.45 out of 180.00 (47%) Question 1 Incorrect Mark 0.00 out of 1.00 Unrealized gains and losses on which investments are reported as a change in net assets on a private NFP organization’s statement of activities? Select one: a. Investments in trading debt securities and all equity securities b. Investments in equity securities only c. All investments in debt and equity securities except hedge investments d. All investments in debt and equity securities Question 2 Incorrect Mark 0.00 out of 1.00 In the operating section of an NFP’s statement of cash flows, a reconciliation to cash from operating activities Select one: a. is not required if the indirect method is used. b. reconciles the change in net assets without donor restrictions to cash from operating activities. c. reconciles the operating change in net assets to cash from operating activities. d. is not required if the direct method is used. Question 4 Incorrect Mark 0.00 out of 1.00 In the net assets section of a private NFP organization’s statement of financial position, Board-designated endowment assets are reported in which category? Select one: a. net assets with endowment restrictions b. net assets with permanent restrictions c. net assets with donor restrictions d. net assets without donor restrictions Question 5 Partially correct Mark 5.19 out of 9.00 Reporting Promises At the beginning of 2020, the Museum of History receives a documented promise to contribute $20,000 at the end of each year for the next four years. The appropriate discount rate is 3 percent, and the promise is considered fully collectible. At the end of 2020, the museum receives the first payment. Required Prepare journal entries to record the promise and the first year’s contribution. If the museum’s net assets are affected, indicate the appropriate category of net assets. Round your answers to the nearest whole number. Description Debit Credit 20,000 0 0 1,415 Contribution revenue - restricted 0 18,585 To record the present value of the documented promise. 558 0 0 558 To record interest earned on outstanding contributions receivable. 19,143 0 0 19,143 To record release of restriction. 5,000 0 0 5,000 To record donor's contribution for the year. Contributions receivable Discount on contributions receivable Discount on contributions receivable Contribution revenue-restricted Net assets released from time restriction-restricted Net assets released from time restriction-unrestricted Cash Contributions receivable Question 7 Incorrect Mark 0.00 out of 1.00 A private NFP health care organization reports estimated uncollectible portions of patient service revenue as Select one: a. unearned revenue. b. bad debt expense. c. nonoperating expense. d. a reduction in patient service revenue. Question 8 Partially correct Mark 9.33 out of 11.00 University Transactions San Rafael University’s transactions for the year include the following: 1. An alumna donates $10,000 in cash for the purchase of a subscription to tax research software. 2. An alumnus donates $1 million in cash, stipulating that income from its investment be used to support accounting club activities. Investment income of $35,000 in cash is earned during the year, but not spent. 3. $50,000 in cash donated in a past year, that was donor-restricted to scholarships, is spent on scholarships for accounting students in the MS in Accounting program. 4. $1.8 million in salaries are paid to accounting faculty. 5. Tuition scholarships of $100,000 are made to accounting students. 6. Tuition waivers of $100,000 are granted to graduate students who work as teaching assistants in the sophomore level accounting classes. 7. Student activity fees totaling $75,000, to be used to support the independent undergraduate and graduate accounting student organizations, are collected with tuition payments. 8. Depreciation of $800,000 on the business school building is recognized. 9. A new student center, with study and classroom space, is constructed in the basement of the business school building, at a cost of $5 million in unrestricted resources. Required Prepare journal entries to record each item. For accounts shown on the statement of activities, indicate the category of net assets affected. Note: For Transactions 5 & 6, assumes full tuition already accrued. Ref. Description Debit Credit 1 10,000 0 0 10,000 2 1,000,000 0 0 1,000,000 To record receipt of donation. 35,000 0 0 35,000 To record receipt of investment income 3 50,000 0 0 50,000 To record release of restrictions. 50,000 0 0 50,000 To record funds spent on scholarships. 4 1,800,000 0 0 1,800,000 5 100,000 0 0 100,000 6 100,000 0 0 100,000 7 75,000 0 0 75,000 8 80,000 0 0 80,000 9 5,000,000 0 0 5,000,000 Cash Contribution revenue-restricted Cash Net assets released from time restriction-restricted Cash Net assets released from time restriction-unrestricted Net assets released from use restriction-restricted Net assets released from use restriction-unrestricted Net assets released from use restriction-unrestricted Net assets released from use restriction-restricted Salaries expense Cash Liability to student organizations Cash Assistantship expense Tuition revenue Cash Tuition receivable Depreciation expense Accumulated depreciation Facilities Cash Question 9 Partially correct Mark 5.56 out of 10.00 Recognition of Contributions The following events relate to Habitat for Humanity International’s activities. If appropriate, assume a discount rate of 3 percent per annum. Expenditures for house building activities are categorized as program expense. Required In each case, identify (a) whether the item should be recorded as a contribution and (b) if recorded, prepare the journal entry or entries to record the event. If net assets are affected, indicate the category of net assets affected. NOTE: Round answers to the nearest whole number, when appropriate. 1. In a telephone solicitation, a potential donor says he will contribute $500 in 30 days. Recorded? Amount Classification: 2. In a telephone solicitation, a potential donor requests that a pledge card be mailed, suggesting that a $250 contribution may be forthcoming. Recorded? Amount Classification: 3. A potential donor makes a documented promise to contribute $100,000 when Habitat for Humanity has raised $100,000 in matching funds; $40,000 in matching funds has been raised to date. Recorded? Amount Classification: 4. Same as 3. except that the potential donor promises to contribute up to $100,000 by giving $1 for each $1 of matching funds raised. Recorded? Amount Classification: 5. A group of college students helps build a house for Habitat for Humanity in inner city Los Angeles; Habitat for Humanity estimates the value of the group’s services at $10,000. Recorded? Amount Classification: 6. A donor contributes $15,000 in cash and signs an agreement to contribute $15,000 at the beginning of each of the next four years, to support specific Habitat for Humanity projects. a. Contribution received now Recorded? Amount Classification: b. Contributions received the next four years Recorded? Amount Classification: 7. A donor contributes $200,000, stating that half is to be used to restore and build houses in upstate New York this year, and half is to be used for the same purpose next year. (HINT: Complete answers considering the initial contribution only.) Recorded? Amount Classification: 8. At the beginning of the year, a donor contributes a building worth $4,000,000 and requires that it be used to house Habitat for Humanity’s administrative offices over the building’s 20-year remaining estimated useful life. Depreciation for the year is recorded as administrative expense. (HINT: Complete answers considering the initial contribution only.) Recorded? Amount Classification: 9. A registered plumber volunteers her services to install plumbing in several Habitat for Humanity houses. The plumber’s services are valued at $5,000. Recorded? Amount Classification: 10. A donor contributes $1,000,000 face value of 4 percent bonds as an endowment to Habitat for Humanity. Income generated from the bonds is to be used to buy appliances for new houses. Donated between interest payment dates, the bonds’ $1,060,000 value includes accrued interest of $25,000. a. Fair value of bonds Recorded? Amount Classification: b. Accrued interest on bonds Recorded? Amount Classification: Yes 500 $ Net assets with donor restrictions No 0 $ N/A Yes 100,000 $ Net assets with donor restrictions Yes 40,000 $ Net assets with donor restrictions Yes 10,000 $ Net assets without donor restrictions Yes 15,000 $ Net assets without donor restrictions Yes 60,000 $ Net assets with donor restrictions Yes 200,000 $ Net assets with donor restrictions Yes 4,000,000 $ Net assets with donor restrictions No 0 $ N/A Yes 1,060,000 $ Net assets without donor restrictions Yes 25,000 $ Net assets with donor restrictions Question 10 Incorrect Mark 0.00 out of 1.00 In its annual report, private NFP organizations report expenses Select one: a. in natural classifications. b. in functional classifications. c. in natural and functional classifications. d. in either natural or functional classifications. Question 11 Incorrect Mark 0.00 out of 1.00 Net assets are recategorized from net assets with donor restrictions to net assets without donor restrictions for which one of the following reasons? Select one: a. Donor-designated resources are used for the designated purpose b. Increase in present value of a donor-restricted promise to contribute c. Collection of restricted promised contributions d. Increase in fair value of investments Question 12 Partially correct Mark 6.00 out of 8.00 Donation of Goods and Services Youth Villages provides housing and support for at-risk children. The following donations were received by Youth Villages during the year: 1. Supplies with a market value of $5,000 were received. 2. Volunteers spent a weekend cleaning facilities. The fair value of their time was $3,000. 3. CPAs contributed services valued at $10,000 to prepare financial statements and Form 990. 4. A contractor contributed services valued at $25,000 to build additional facilities. Required Prepare journal entries to record the events described for the current year. For accounts shown on the statement of activities, indicate the category of net assets affected. NOTE: If an event does not require a journal entry, select "No entry" as your answers. Ref. Description Debit Credit 1 5,000 0 0 5,000 2 3,000 0 0 3,000 3 10,000 0 0 10,000 4 25,000 0 0 25,000 Supplies In-kind contributions revenue—unrestricted In-kind contributions revenue—unrestricted Contributions of services—unrestricted Contributions receivable Contributions of services—unrestricted Contributions receivable Contributions of services—unrestricted Question 13 Partially correct Mark 5.23 out of 8.00 Split-Interest Agreement At the beginning of the current year, Pauline Doyle gave Rocky Mountain College $600,000 in cash, with the provision that the cash be invested in income-producing securities. The college is to pay Pauline the income from the investments for her remaining life. Upon her death, remaining resources become available to the college with no restrictions as to use. The college invested the $600,000 in securities earning dividend and interest income of $17,000, received in cash. The securities have a fair value of $601,000 at the end of the year. Required Prepare journal entries to record the split-interest agreement during the current year. Investment income is defined as dividend and interest income and unrealized gains and losses. Description Debit Credit 600,000 0 0 600,000 To record contribution under the life income agreement. 600,000 0 0 600,000 To record investment. Cash 18,000 0 0 16,000 0 1,000 To record the year's income andchange in fair value of investments. 1,000 0 0 1,000 To record income payment to the donor. Cash Contribution revenue-restricted Investments Cash Contribution revenue-unrestricted Contribution revenue-restricted Investments Cash Question 14 Incorrect Mark 0.00 out of 1.00 The following are some of the financial statements required in the State of New York ACFR: 1. Government-wide statement: statement of net position 2. Government-wide statement: statement of activities 3. Fund statement: balance sheet–governmental funds 4. Fund statement: statement of revenues, expenditures and changes in fund balances—governmental funds 5. Fund statement: statement of net position–proprietary funds 6. Fund statement: statement of revenues, expenses and changes in net position–proprietary funds For each of the following balances related to the financial performance of the State of New York, indicate the number(s) of the statements on which the balance is reported. Personal income tax revenue 6 only 2 only 4 only 2 and 4 Question 15 Partially correct Mark 16.94 out of 18.00 Major Funds Lenox County provides the following information on its governmental and enterprise funds: Fund Assets Liabilities Revenues Expenditures/ Expenses General fund $120,000 $108,000 $1,020,000 $1,174,500 Grants special revenue fund 82,500 65,250 300,000 145,500 Parks and recreation