The Science Road Show (SRS) is a not-for-profit organization that puts on traveling science demonstrations throughout the state. SRS operates on a September 1–August 31 fiscal year. The organization began the year with the following account balances:
SRS recorded the following financial events during the 2021 fiscal year:
1. On September 1, SRS took out a $200,000 bank loan with an annual interest rate of 4.5 percent.
SRS’s prior outstanding loan has an annual interest rate of 6.0 percent. Annual interest payments
on both loans are due August 31.
2. Halfway through the fiscal year, SRS used the new loan proceeds to purchase a new set that is expected to last 10 years and have no salvage value. SRS also recorded $5,000 in depreciation on its existing equipment, per its policy of recording depreciation annually.
3. On the first day of the fiscal year, SRS held a membership drive. Each 2-year membership is priced at $1,000 and entitles the member to benefits for 2 years. SRS sold and received payment for 50 memberships.
4. SRS sold $375,000 in tickets. All tickets were paid for in cash.
5. SRS received a $100,000 check for a foundation grant that was awarded in the previous fiscal year. During the year, SRS was awarded another $50,000 foundation grant. Payment on the second grant is expected in October 2021.
6. During the fiscal year, SRS received $60,000 in new donor pledges and collected 75 percent of those pledges. SRS also collected 60 percent of the outstanding pledges from the previous fiscal year. Based on past experience, SRS expects that none of the remaining outstanding pledges from the prior fiscal year will be collected.
7. Throughout the year, SRS ordered, paid for, and used $15,000 of program booklets. In August, SRS ordered (on account) $5,000 of programs for the following fiscal year.
8. SRS’s employees earned $25,000 per month. Employees are paid with a 1-month lag. SRS also fully paid its prior-year obligations to employees.
9. Payments on SRS’s operating leased vehicles and equipment are due 1 month in advance. Currently lease payments totaled $10,000 per month. Next year, they will rise to $12,000 per month.