ACT 6692 Module 22 – Assignment (Problems)

Problem 22-1.

a. Describe the basic accounting for private not-for-profit groups promoted by FASB
Statement No. 117 including a brief description of the three net asset classes.

b. Indicate in which of the net asset classes the following transactions belong:
1. Donor makes gift to not-for profit which must be invested and maintained in
perpetuity
2. Income Earned on donation noted in item #1 is restricted to certain program
expenditures
3. Gains/Losses, both realized and unrealized, on donation noted in item #1. Not
stipulated in donor agreement or by the law
4. Expenses paid out for programs stipulated in donor agreement relating to donation
made in item #1.

Problem 22-2.

How do you differentiate between a voluntary health and welfare organization and another not-for-
profit organization?

Problem 22-3

By placing a check mark in the appropriate column, indicate all of the funds of a voluntary health and welfare
organization in which the following events might correctly be recorded. (Hint: An event may require
entries in more than one fund.)

Current Funds Plant Endowment

Event Unrestricted Restricted Fund Fund
a. Allocation of
expenses to
programs and services _______ _______ _______ _______

b. Receipt of cash
contributions _______ _______ _______ _______

c. Creation of a
designated account
from unrestricted
net assets _______ _______ _______ _______

d. Recording of
depreciation
expense _______ _______ _______ _______

e. Expending of or
releasing cash for
donor-specified
activity _______ _______ _______ _______
Problem 22-4

By placing a check mark in the appropriate column, indicate in which fund of a voluntary health and welfare
organization the following events normally would be recorded. (Note: An event may require entries in
more than one fund.)

Current Funds Plant Endowment

Event Unrestricted Restricted Fund Fund
a. Receipt of donated
securities, revenue
from which is to be
used for both
unrestricted and
specified current
activities _______ _______ _______ _______

b. Receipt of revenue
from donated
securities in step (a) _______ _______ _______ _______

c. Receipt of donated
fixed assets, which
are to be sold, with
no restrictions on
proceeds _______ _______ _______ _______

d. Recording of
depreciation _______ _______ _______ _______

e. Appropriation of the
unrestricted net
assets by the board
of directors _______ _______ _______ _______
Problem 22-5.

The following is an adjusted preclosing trial balance of the General Funds of Barnes Nursing Home (non-
profit).

Barnes Nursing Home

Adjusted Current Funds Trial Balance
December 31, 20X5

Unrestricted Restricted
Cash 300,000 107,000
Pledges Receivable 12,000 206,000
Accrued Interest Receivable. 1,000
Inventory of Supplies 120,000
Vouchers Payable 50,000 10,000
Accrued Expenses 25,000
Refundable Deposits 2,000
Allowance for Uncollectible
Pledges 3,000
Net Assets, January 1, 20X5
Designated--Unrestricted 12,000
Undesignated--Unrestricted 26,000
Temporarily Restricted 3,000
Permanently Restricted 250,000
Contributions 200,000 50,000
Resident Service Revenue 415,000
Other Operating Revenue 20,000 5,000
Outreach Expenses 20,000
Nursing Services Expenses 100,000
Dietary Service Expense 100,000
General Service Expense 45,000
Financial Service Expense 60,000
Reclassification In--
Satisfaction of Program
Restriction 5,000
Reclassification Out--
Satisfaction of Program
Restrictions 5,000
758,000 758,000 318,000 318,000

Required:

Prepare a statement of activities and a statement of financial position as of December 31, 20X5.