Whitestone, a nongovernmental not-for-profit organization, received contribution in December, year I. The donor restricted use of the contribution until March, year 2. How should Whitestone record the contribution?
Report as income in year I.
At the beginning of the year, the Saker Fund, a nongovernmental not-for-profit corporation, received a $125,000 contribution restricted to youth activity programs. During the year, youth activities generated revenues of $89,000 and had program expenses of $95,000. What amount should Saker report as net assets released from restrictions for the current year?
During year I, an alumnus of Smith College, a private not-for-profit college, transferred $100,000 to the college with the stipulation that it be spent for library' acquisitions. However, the alumnus specified that none of the cash transferred could be spent until the college had matched the entire amount transferred with donations from other alumni by December 31, year 2. As of December 31, year I, the college had received matching cash donations of only $5,000 from other alumni, and the college estimated that it was reasonably possible that it would not reach the goal of $100,000 by December 31, year 2. If the funds are not matched by December 31, year 2, the cash will be returned to the alumnus. On the college's statement of financial position at December 31, year I, the cash transfer of $100,000 would be included in the amount reported for
During the year, Public College received the following:
An unrestricted $50,000 pledge to be paid the following year.
A $25,000 cash gift restricted for scholarships.
A notice from a recent graduate that the college is named as beneficiary of $10,000 in that graduate's will.
What amount of contribution revenue should Public College report in its statement of activities?
Clara Hospital, a private not-for-profit hospital, earned $250,000 of gift shop revenues and spent $50,000 on research during the year ended December 31, year 2. The $50,000 spent on research was part of a $75,000 contribution received during December of year I from a donor who stipulated that the donation be used for medical research. For the year ended December 31, year 2, what was the increase in unrestricted net assets from the events occurring during year 2?
On the statement of operations for a nonprofit, nongovernmental hospital, which of the items below is included in the amount reported for "revenue and gains over expenses and losses" (the performance indicator)?
I. Unrealized loss on other than trading securities. The securities are included in unrestricted net assets.
II. Contribution received from donor which cannot be used until next year.
Neither I or II
Unrealized gains on investments which are permanently restricted as to use by donors are reported by private, nonprofit hospital on the
Statement of changes in net assets.
On December 31, year I, Royal Haven, a voluntary health and welfare organization, received a pledge from a donor who stipulated that $1,000 would be given to the organization each year for the next 5 years, starting on December 31, year I. For the year ended December 31, year I, Royal Haven should report, on its statement of activities,
Temporarily restricted revenues valued at present value of an annuity due for 5 periods.
Lea Meditators is a not-for-profit religious organization. A storm broke glass windows in Lea's building. A member of Lea's congregation, professional glazier, replaced the windows at no charge. In Lea's statement of activities, the breakage and replacement of the windows should
Be reported as an increase in both expenses and contributions.
On the statement of activities for nongovernmental, not-for-profit organization, expenses should be deducted from
Unrestricted revenues and other additions.
SFAS 117 , Financial Statements of not-for-Profit Organizations, focuses on
Basic information for the organization as a whole.
Arkin Corp. is a nongovernmental not-for-profit organization involved in research. Arkin's statement of functional expenses should classify which of the following as support services?
a. Salaries of fund-raisers for funds used in research.
b. Salaries of staff researchers involved in research.
c. Costs of equipment involved in research.
d. Costs of laboratory supplies used in research.
Salaries of fund-raisers for funds used in research.
Scarbrough Hospital, nonprofit hospital affiliated with Scarbrough University, received the following cash contributions from donors during the year ended December 31, year I:
Contributions restricted by donors for research $ 75,000
Contributions restricted by donors for capital
Neither of the contributions was spent during year I; however, during year 2, the hospital spent the entire $75,000 contribution on research and the entire $225,000 contribution on a capital asset which was placed into service during the year. On the hospital's statement of operations for the year ended December 31, year 2, what total amount should be reported for "net assets released from restrictions"?
A private not-for-profit college should prepare statement of financial position and which of the following financial statements?
I. Statement of activities.
II. Statement of functional expenses.
III. Statement of cash flows.
I and III
Terry, an auditor, is performing test work for a not-for -profit hospital. Listed below are components of the statement of operations.
Revenue relating to charity care $100,000
Bad debt expense 70,000
Net assets released from restrictions 50,000
used for operations
Other revenue 80,000
Net patient service revenue (includes 500,000
revenue related to charity care)
What amount would be reported as total revenues, gains, and other support on the statement of operations?
A nongovernmental, not-for-profit organization received the following donations of corporate stock during the year:
Donation I Donation 2
Number of shares 2,000 3,000
Adjusted basis $8,000 $5,500
Fair market value at time of donation 8,500 6,000
Fair market value at year-end 10,000 4,000
What net value of investments will the organization report at the end of the year?
Which of the following assets of nongovernmental not-for-profit charitable organization must be depreciated?
a. Land valued at $1 million being used as the site of the new senior citizen home.
b. A freezer costing $150,000 for storing food for the soup kitchen.
c. A bulk purchase of $20,000 of linens for its nursing home.
d. Building costs of $500,000 for construction in progress for senior citizen housing.
A freezer costing $150,000 for storing food for the soup kitchen.
Hope United, voluntary health and welfare organization, received the following contributions in year I:
I. $500 from donors who stipulated that the money not be spent until year 2.
II. $1,000 from donors who stipulated the contributions be used for the acquisition of equipment, none of which was acquired in year.
How would the above events affect the following at year-end December 31, year I?
Temporarily restricted net assets Revenues
a. $1,000 $ 1,000
b. $1,500 $ 1,500
c. $0 $0
d. $500 $ 1,500
During year I, Jones Foundation received the following support:
A cash contribution of $875,000 to be used at the board of directors' discretion;
A promise to contribute $500,000 in year I from supporter who has made similar contributions in prior periods;
Contributed legal services with value of $100,000, which Jones would have otherwise purchased.
At what amounts would Jones classify and record these transactions?
Unrestricted revenue Temporarily restricted revenue
a. $1,375,000 $0
b. $ 875,000 $500,000
c. $ 975,000 $0
d. $ 975,000 $500,000
$ 975,000 $500,000
Which of the following transactions would result in an increase in unrestricted net assets for the year ended December 31, year I?
I. A private, not-for-profit hospital earned interest on investments which were board-designated.
Il. A voluntary' health and welfare organization received unconditional promises to give (pledges) which will not be received until the beginning of year 2.
The donors placed no restrictions on their donations.
Payne Co. prepares its statement of cash flows using the indirect method. Payne's unamortized bond discount account decreased by $25,000 during the year. How should Payne report the change in unamortized bond discount in its statement of cash flows?
As an addition to net income in the operating activities section.
Gridiron University is a private university. A successful alumnus has recently donated to Gridiron for the purpose of funding a "center for the study of sports ethics." This donation is conditional upon the university raising matching funds within the next 12 months. The university administrators estimate that they have a chance of raising the additional money. How should this donation be accounted for?
As refundable advance.
On December 31, year I, Hope Haven, a voluntary health and welfare organization, received a pledge from a donor who stipulated that $1,000 would be given to the organization each year for the next 5 years, starting on December 31, year 2. Present value factors at for 5 periods are presented below.
Present value of an ordinary annuity for 5 periods at 6 % 4.21236
Present value of an annuity due for 5 periods at 6% 4.46511
For the year ended December 31, year I, Hope Haven should report, on its statement of activities,
Temporarily restricted revenues of $4,212.
A statement of functional expenses is required for which one of the following private nonprofit organizations?
a. Performing arts organizations.
d. Voluntary health and welfare organizations.
Voluntary health and welfare organizations.
Albert University, private not-for-profit university, had the following cash inflows during the year ended June 30, year I:
I. $500,000 from students for tuition.
Il. $300,000 from a donor who stipulated that the money be invested indefinitely.
Ill. $100,000 from a donor who stipulated that the money be spent in accordance with the wishes of Albert's governing board.
On Albert University's statement of cash flows for the year ended June 30, year I, what amount of these cash flows should be reported as operating activities?
Tucker Hospital, a nonprofit hospital affiliated with Tucker University, received a donation of medical supplies during the year ended December 31, year I. The supplies cost the vendor $10,000 and had a selling price of $15,000 on the date they were donated. The vendor did not place any restrictions on how the supplies were to be used. During year I, all of the donated medical supplies were used. On the hospital's statement of operations for the year ended December 31, year I, how should the donation be reported?
The donation should be included in both revenue and operating expenses in the amount of $15,000
A nonprofit, private hospital should report its health care receivables at net realizable value on the balance sheet. Which of the following allowances would be deducted from the hospital's gross receivables from health care services to determine their net realizable value?
I. Allowance for u ncollectible accounts.
Il. Allowance for contractual adjustments.
Ill. Allowance for employee discounts.
I, II, and III
On December 30, year I, the Board of Trustees of Berry College, a private not-for-profit college, designated of unrestricted net assets for the construction of an addition to its science building. What effect does this designation have on the college's unrestricted and temporarily restricted net assets which are reported on the college's statement of financial position at December 31, year I?
Unrestricted net assets Temporarily restricted net assets
a. No effect Increase
b. Decrease Increase
c. Decrease No effect
d. No effect No effect
No effect No effect
Community Enhancers, nongovernmental not-for-profit organization, received the following pledges:
Restricted for capital additions 300,000
All pledges are legally enforceable. However, Community's experience indicates that 5% of all pledges prove to be uncollectible. What amount should Community report as pledges receivable, net of any required allowance account?
In April year I, Delta Hospital purchased medicines from Field Pharmaceutical Co. at a cost of $5,000. However, Field notified Delta that the invoice was being canceled and that the medicines were being donated to Delta. Delta should record this donation of medicines as
Other operating revenue of $5,000.