[The following information applies to the questions displayed below.] For a number of years, a private not-for-profit entity has been preparing financial statements that do not necessarily conform to U.S. generally accepted accounting principles. At the end of the most recent year (Year 2), those financial statements show total assets of $900,000, total liabilities of $100,000, net assets without donor restriction of $400,000, and net assets with donor restrictions of $400,000. This last category is composed of $300,000 in net assets with purpose restrictions and $100,000 in net assets that must be permanently held. At the end of Year 1, financial statements show total assets of $700,000, total liabilities of $60,000, net assets without donor restriction of $340,000, and net asset with donor restrictions of $300,000. This last category is composed of $220,000 in net assets with purpose restrictions and $80,000 in net assets that must be permanently held. Total expenses for Year 2 were $500,000 and reported under net assets without donor restrictions. Each part that follows should be viewed as an independent situation. me that on January 1, Year 2, several supporters of the entity spent their own time and money to construct a garage for the I's vehicles. It was donated for free. The labor had a fair value of $20,000, and the materials had a fair value of $50,000. It cted to last for 10 years and have no residual value. On that day, the entity increased its contributed support under net ass out donor restrictions by $70,000 and increased its expenses under net assets without donor restrictions by the same amo er entry has ever been made.
[The following information applies to the questions displayed below.] For a number of years, a private not-for-profit entity has been preparing financial statements that do not necessarily conform to U.S. generally accepted accounting principles. At the end of the most recent year (Year 2), those financial statements show total assets of $900,000, total liabilities of $100,000, net assets without donor restriction of $400,000, and net assets with donor restrictions of $400,000. This last category is composed of $300,000 in net assets with purpose restrictions and $100,000 in net assets that must be permanently held. At the end of Year 1, financial statements show total assets of $700,000, total liabilities of $60,000, net assets without donor restriction of $340,000, and net asset with donor restrictions of $300,000. This last category is composed of $220,000 in net assets with purpose restrictions and $80,000 in net assets that must be permanently held. Total expenses for Year 2 were $500,000 and reported under net assets without donor restrictions. Each part that follows should be viewed as an independent situation. me that on January 1, Year 2, several supporters of the entity spent their own time and money to construct a garage for the I's vehicles. It was donated for free. The labor had a fair value of $20,000, and the materials had a fair value of $50,000. It cted to last for 10 years and have no residual value. On that day, the entity increased its contributed support under net ass out donor restrictions by $70,000 and increased its expenses under net assets without donor restrictions by the same amo er entry has ever been made.
Chapter23: Exempt Entities
Section: Chapter Questions
Problem 31P
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