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Help & Save is a private not-for-profit entity that operates in Kansas. Swim For Safety is a private not-for- profit entity that operates in Missouri. The leaders of these two organizations have decided to combine forces on January 1, 2020, in order to have a bigger impact from their work. They are currently discussing ways by which this combination can be created. The following are statements of financial position for both charities at that date. HELP & SAVE Statement of Financial Position January 1, 2020 Assets $1,800,000 110,000 400,000 800,000 $3,110,000 Cash Contributions receivable (net) Investments Buildings & equipment (net) Total assets Liabilities Accounts payable and accrued liabilities Notes payable $210,000 1,200,000 $1,410,000 Total liabilities Net Assets Net assets without donor restrictions $1,300,000 400,000 $1,700,000 $3,110,000 Net assets with donor restrictions Total net assets Total liabilities and net assets SWIM FOR SAFETY Statement of Financial Position January 1, 2020 Assets $700,000 250,000 270,000 690,000 $1,910,000 Cash Contributions receivable (net) Investments Buildings & equipment (net) Total assets Liabilities Accounts payable and accrued liabilities Notes payable $270,000 720,000 $990,000 Total liabilities Net Assets $520,000 400,000 $920,000 $1,910,000 Net assets without donor restrictions Net assets with donor restrictions Total net assets Total liabilities and net assets

Help & Save is a private not-for-profit entity that operates in Kansas. Swim For Safety is a private not-for- profit entity that operates in Missouri. The leaders of these two organizations have decided to combine forces on January 1, 2020, in order to have a bigger impact from their work. They are currently discussing ways by which this combination can be created. The following are statements of financial position for both charities at that date. HELP & SAVE Statement of Financial Position January 1, 2020 Assets $1,800,000 110,000 400,000 800,000 $3,110,000 Cash Contributions receivable (net) Investments Buildings & equipment (net) Total assets Liabilities Accounts payable and accrued liabilities Notes payable $210,000 1,200,000 $1,410,000 Total liabilities Net Assets Net assets without donor restrictions $1,300,000 400,000 $1,700,000 $3,110,000 Net assets with donor restrictions Total net assets Total liabilities and net assets SWIM FOR SAFETY Statement of Financial Position January 1, 2020 Assets $700,000 250,000 270,000 690,000 $1,910,000 Cash Contributions receivable (net) Investments Buildings & equipment (net) Total assets Liabilities Accounts payable and accrued liabilities Notes payable $270,000 720,000 $990,000 Total liabilities Net Assets $520,000 400,000 $920,000 $1,910,000 Net assets without donor restrictions Net assets with donor restrictions Total net assets Total liabilities and net assets

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Help & Save is a private not-for-profit entity that operates in Kansas. Swim For Safety is a private not-for- profit entity that operates in Missouri. The leaders of these two organizations have decided to combine forces on January 1, 2020, in order to have a bigger impact from their work. They are currently discussing ways by which this combination can be created. The following are statements of financial position for both charities at that date. HELP & SAVE Statement of Financial Position January 1, 2020 Assets Cash $1,800,000 110,000 400,000 800,000 $3,110,000 Contributions receivable (net) Investments Buildings & equipment (net) Total assets Liabilities Accounts payable and accrued liabilities Notes payable Total liabilities $210,000 1,200,000 $1,410,000 Net Assets $1,300,000 400,000 $1,700,000 $3,110,000 Net assets without donor restrictions Net assets with donor restrictions Total net assets Total liabilities and net assets SWIM FOR SAFETY Statement of Financial Position January 1, 2020 Assets Cash $700,000 250,000 270,000 690,000 $1,910,000 Contributions receivable (net) Investments Buildings & equipment (net) Total assets Liabilities Accounts payable and accrued liabilities Notes payable $270,000 720,000 $990,000 Total liabilities Net Assets Net assets without donor restrictions $520,000 400,000 $920,000 $1,910,000 Net assets with donor restrictions Total net assets Total liabilities and net assets The buildings and equipment reported by Help & Save have a fair value of $1,020,000. The buildings and equipment reported by Swim For Safety have a fair value of $810,000.
Transcribed Image Text:Help & Save is a private not-for-profit entity that operates in Kansas. Swim For Safety is a private not-for- profit entity that operates in Missouri. The leaders of these two organizations have decided to combine forces on January 1, 2020, in order to have a bigger impact from their work. They are currently discussing ways by which this combination can be created. The following are statements of financial position for both charities at that date. HELP & SAVE Statement of Financial Position January 1, 2020 Assets Cash $1,800,000 110,000 400,000 800,000 $3,110,000 Contributions receivable (net) Investments Buildings & equipment (net) Total assets Liabilities Accounts payable and accrued liabilities Notes payable Total liabilities $210,000 1,200,000 $1,410,000 Net Assets $1,300,000 400,000 $1,700,000 $3,110,000 Net assets without donor restrictions Net assets with donor restrictions Total net assets Total liabilities and net assets SWIM FOR SAFETY Statement of Financial Position January 1, 2020 Assets Cash $700,000 250,000 270,000 690,000 $1,910,000 Contributions receivable (net) Investments Buildings & equipment (net) Total assets Liabilities Accounts payable and accrued liabilities Notes payable $270,000 720,000 $990,000 Total liabilities Net Assets Net assets without donor restrictions $520,000 400,000 $920,000 $1,910,000 Net assets with donor restrictions Total net assets Total liabilities and net assets The buildings and equipment reported by Help & Save have a fair value of $1,020,000. The buildings and equipment reported by Swim For Safety have a fair value of $810,000.
c. Assume that these two organizations are combined into a new private not-for-profit entity to be known as Help-Swim-Save. A new governing body will be formed to manage and operate this new organization. What balances will appear on the statement of financial position immediately after control is gained? HELP-SWIM-SAVE Statement of Financial Position January 1, 2020 Assets Cash Contributions receivable (net) Investments Buildings & equipment (net) Total assets $ Liabilities Accounts payable and accrued liabilities Notes payable Total liabilities $ Net Assets Net assets without donor restrictions Net assets with donor restrictions Total net assets $ Total liabilities and net assets
Transcribed Image Text:c. Assume that these two organizations are combined into a new private not-for-profit entity to be known as Help-Swim-Save. A new governing body will be formed to manage and operate this new organization. What balances will appear on the statement of financial position immediately after control is gained? HELP-SWIM-SAVE Statement of Financial Position January 1, 2020 Assets Cash Contributions receivable (net) Investments Buildings & equipment (net) Total assets $ Liabilities Accounts payable and accrued liabilities Notes payable Total liabilities $ Net Assets Net assets without donor restrictions Net assets with donor restrictions Total net assets $ Total liabilities and net assets
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