A newly established not-for-profit organization engaged in the following transactions:
- A donor pledged $1,000,000, giving the organization a legally enforceable 90-day note for the full amount
- The donor paid $300,000 of the amount pledged
- The organization purchased a building for $600,000, paying $120,000 and giving a 30-year mortgage note for the balance.The building has a 30-year useful life. When appropriate, the organization charges a full year’s depreciation in the period of acquisition
- It hired employees.By the end of the period they had earned $4,000 in wages, but had not yet been paid.
The organization accounts for its activities in a single fund
- Prepare journal entries to record the transactions, making the following alternative assumptions as to the organizations measurement focus: cash only, cash plus other current financial resources, all economic resources
E 2-6. For each of the following transactions, indicate the fund in which each transaction would most likely be recorded:
- The city collects $3 million of taxes on behalf of the county in which it is located.
- It spends $4 million to pave city streets, using the proceeds of a city gasoline tax dedicated for road and highway improvements.
- It receives a contribution of $5 million. Per the stipulation of the donor, the money is to be invested in marketable securities and the interest from the securities is to be used to maintain a city park.
- It collects $800,000 in landing fees at the city-owned airport.
- It earns $200,000 on investments set aside to make principal payments to the city’s outstanding bonds. The bonds were issued to finance improvements to the city’s tunnels and bridges.
- It pays $4 million to a contractor for work on one of these bridges.
- It pays $80,000 in wages and salaries to police officers.
- It purchases from an outside supplier $40,000 of stationery that it will “sell” to its various operating departments.Place your order now for a similar paper and have exceptional work written by our team of experts to guarantee you A Results
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