Question;Preparation of journal entries and financial statement for not-for-profitTomorrows World is a not -for- profit organization. At the end of last year, the organizationreported the following trail balance.Debit$360,0004,800,0001,040,0002,400,000_____credit$800,0001,600,0003,200,0002,200,000800,000$8,600,000CashInvestmentsContribution receivablePPE,netPayablesLong term liabilitiesNet asset-unrestrictedNet asset-temporarilyrestrictedNet assets-permanentlyrestricted$8,600,000The investments are allocated as follows: 45% are unrestricted, 40% are temporarily restricted(use of thses funds is stipulated by the donors) and 15% are permanently restricted (only theinterest income may be used to fund operating expenses if so directed by the organization?sBoard of Trustees, and no such designation was made for this year). Investment income (paid incash) is 5% for the current year.During the year, the organization received $5,600,000 in unrestricted donation and $ 560,000 indonations whose use is temporarily restricted as to use by donors. All of these donation areaccount.In addition, it recognized program expenses of $ 400,000 is spent using temporarilyrestricted funds for approved purposes, thus receiving the appropriate release from the donorsrestrictions.Tomorrows World collected $6,000,000of contributions receivable, paid $ 5,800,000 of payableand purchased additional land in the amount of $ 260,000 (depreciation expense of $180,000 isrecognized related to the depreciable assets). Interest expense on the long term debt isincluded in the expenses referenced above, and no repayment of the principal is recognizedduring the year.Required:a. Prepare journal entries for the organization financial activities during the year.b. Prepare the year end statement of activities and statement of financial position.
Paper#41780 | Written in 18-Jul-2015Price : $19