Transactions Mid Term II Flashcards
The Museum of Contemporary Art (MCA) received a $90,000 cash gift from a patron that asked the gift be used to acquire additional works of art. During the year, MCA used the gift, along with $620,000 of resources that had previously been received and subject to restrictions, to add to its collection. Assuming all purchases of art are to be reported as expenses, show how each transaction affects the fundamental equation of accounting.
1.) Assets
Cash + 1,000,000
Investments (Restricted) + 750,000
2.) Net Assets
TNA (Revenues) $250,000
PNA (Revenues) $750,000
The Evans Schools of Public Affairs held its annual fundraiser on October 29, 2015. The Fellowship Dinner raised $560,000 in pledges and cash contributions. As of November 30th, the school had received $350,000 of the $560,000. The Dean expects 5 percent of all pledges will not be collected. Assuming that proceeds from the event shall be used to support student fellowships and internships the upcoming academic year, how much does the Evans School report in pledges receivable?
Be sure to show how each transaction affects the organizations assets, liabilities, and/or net assets.
1.) Assets
Cash + $350,000
Pledges + $210,000
Pledges - $28,000
Value of Pledges Receivable = (560,000 - 350,000 - 28,000) = $ 182,000
2.) Net Assets
TNA (Revenues) $560,000
UNA (Bad Debt Expenses) $28,000
Dorchester Home Health Services (DHHS) is a private, nonprofit home health agency founded in 1992 by four retired nurses. At the start of FY 2013, DHHS reported $593,298 in property, plant, and equipment (net of depreciation). DHHS purchased four vehicles in cash at cost of $75,000. Assuming that these vehicles have a useful life of four years and a salvage value of $10,000, how much should DHHS report in property plant and equipment (net of depreciation) at the end of FY 2013 if depreciation expense on the existing property, plant, and equipment was expected to be $33,450.
Be sure to show how each transaction affects the organizations assets, liabilities, and/or net assets.
1.) Cash
Cash + $90,000
Cash - $710,000
2.) Net Assets
TNA (Revenues) + 90,000
UNA (Revenues) 710,000
TNA (Revenues) 710,000
UNA (Expense) 710,000
The Museum of Contemporary Art (MCA) operates a gift shop and coffee bar. The gift shop reported $1,250,000 in revenues (all cash sales). Payroll and employee benefit expenses for the year were $250,000. The Museum purchased $350,000 in inventory (for the gift shop) and $150,000 in supplies (for the coffee bar) and reported a balance of $50,000 in inventory and $2,000 in supplies. Assuming all purchases and expenses had been paid in full, how much did the gift shop report in profits or losses in FY 2015.
Be sure to show how each transaction affects the organizations assets, liabilities, and/or net assets.
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