The following gifts are received in Year One by a not-for-profit organization:
(I.) $2,000 specified by the donor to be used to pay salaries.
(II.) $10,000 for new conference room furniture.
III. $5,000 to be held for one year before being expended.
The salaries are paid in Year Two and the conference room furniture is purchased in Year One.
How much should be shown as increases as Temporarily Restricted Net Assets in Year One?
A) $2,000
B) $7,000
C) $12,000
D) $15,000
E) $17,000
How much should be reclassified on the Statement of Activities in Year Two from the Temporarily Restricted column to the Unrestricted column?
A) $2,000.
B) $5,000.
C) $7,000.
D) $10,000.
E) $12,000.
Solution Preview
B) The salaries are paid in the second year and the $5,000 must be held for one year before being spent; they must be temporary net assets for the first year.
C)
These statements include much money you've earned (your revenue) and subtracts how much you've spent (your expenses), resulting in the total of your unrestricted net assets. The statement of activities includes how much money you've earned (your revenue) and subtracts how much you've spent (your ...
Solution Summary
The solution examines the non profit organization accounting. The statement of activities in year two is determined.
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