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Fiscal Year

Following are five unrelated transactions or events pertaining to Midwest Drug Treatment and Counseling Service Agency (a nongovernmental NPO) for its current fiscal year. Prepare journal entries to record each transaction or event.
1) A public-spirited citizen made an unrestricted cash gift of $300,000 to the agency.
2) The agency conducted its annual fund drive that raised $150,000 in cash and $175,000 in pledges, 1% of which are not expected to be collected. The pledges are not expected to be collected until the next fiscal year. The cash support is considered unrestricted.
3) The agency sponsored a charity carnival and walkathon that raised $120,000 in cash, from which $25,000 in direct costs of holding the special event were paid. (Net proceeds were $95,000.)
4) The agency purchased a new computer data system for cash in the amount of $35,000 to improve its client database. The amount was paid from cash previously provided for that specific purpose by a local contributor.
5) Salaries and wages for the year amounted to $450,000, of which $30,000 remained unpaid at year end. (Ignore FICA and payroll tax withholdings.)

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Solution Preview

1. DRCash 300,000
CR Unrestricted Revenues 300,000

2. DR Cash 150,000
DR Pledges Receivable 175,000
CR Allowance for Uncollectible Pledges 1,750

Solution Summary

This Solution contains journal entries for the provided actions.