Journal entries for a nonprofit Fruits & Veggies, a nonprofit, conducts two types of programs: education and research. It does not use fund accounting. During 2018, the following transactions and events took place. Prepare journal entries for these transactions, identifying increases and decreases by net asset classification as appropriate.  1. Pledges amounting to $200,000 were received, to be used for any purpose designated by the trustees. Fruits & Veggies normally collects 90 percent of the amount pledged.  2. Fruits & Veggies collected $190,000 in cash on the amount pledged in the previous transaction. It wrote off the balance as uncollectible.  3. Ed Victor donated $5,000 cash in 2018, stipulating that it could be used for any purpose, but only during 2019.  4. Howard Gore donated $675,000, stipulating that the donation must be used solely to purchase a building that Fruits & Veggies could use for research.  5. Fruits & Veggies invested $20,000 of unrestricted resources in equity securities. Earnings on these resources amounted to $1,000 in 2018.  6. Late in the year, Fruits & Veggies used Howard Gore’s donation (see Transaction 4) and unrestricted resources of $140,000 to purchase a building for research purposes.  7. The following services were donated to Fruits & Veggies:  a. Audit of the financial statements by an accounting firm—$5,000  b. Professional services by an advertising agency in connection with a fundraising campaign—$3,000  c. Ushering services at educational meetings, provided by high school students. If paid for, these services would cost $1,000.  8. At year-end, the investments referred to in Transaction 5 had a fair value of $22,000.  9. Fruits & Veggies conducted a fundraising campaign, the donations to be used solely for research into the health benefits of asparagus. Donations totaled $45,000 in cash.  10. The Board of Directors of Fruits & Veggies designated $35,000 for the acquisition of research equipment.

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Journal entries for a nonprofit

Fruits & Veggies, a nonprofit, conducts two types of programs: education and research. It does not use fund accounting. During 2018, the following transactions and events took place. Prepare journal entries for these transactions, identifying increases and decreases by net asset classification as appropriate. 

1. Pledges amounting to $200,000 were received, to be used for any purpose designated by the trustees. Fruits & Veggies normally collects 90 percent of the amount pledged. 

2. Fruits & Veggies collected $190,000 in cash on the amount pledged in the previous transaction. It wrote off the balance as uncollectible. 

3. Ed Victor donated $5,000 cash in 2018, stipulating that it could be used for any purpose, but only during 2019. 

4. Howard Gore donated $675,000, stipulating that the donation must be used solely to purchase a building that Fruits & Veggies could use for research. 

5. Fruits & Veggies invested $20,000 of unrestricted resources in equity securities. Earnings on these resources amounted to $1,000 in 2018. 

6. Late in the year, Fruits & Veggies used Howard Gore’s donation (see Transaction 4) and unrestricted resources of $140,000 to purchase a building for research purposes. 

7. The following services were donated to Fruits & Veggies: 

a. Audit of the financial statements by an accounting firm—$5,000 

b. Professional services by an advertising agency in connection with a fundraising campaign—$3,000 

c. Ushering services at educational meetings, provided by high school students. If paid for, these services would cost $1,000. 

8. At year-end, the investments referred to in Transaction 5 had a fair value of $22,000. 

9. Fruits & Veggies conducted a fundraising campaign, the donations to be used solely for research into the health benefits of asparagus. Donations totaled $45,000 in cash. 

10. The Board of Directors of Fruits & Veggies designated $35,000 for the acquisition of research equipment.

Ref.
Description
Debit
Credit
1
Contributions receivable
200,000 v
Allowance for uncollectible pledges
20,000
Contributions revenue-Support without donor restrictions
180,000 v
2
Cash
190,000 v
Allowance for uncollectible pledges
0 x
Contributions revenue-Support without donor restrictions
Net unrealized/realized investment gains/losses - with donor restrictions
0 x
Cash
5,000 v
Contributions revenue-Support with donor restrictions
5,000 v
4
Cash
675,000 v
Contributions revenue-Support with donor restrictions
675,000
Investments
20,000 v
Cash
20,000 v
To record investment in equity securities.
Cash
1,000 v
Investment income without donor restrictions
1,000 v
To record receipt of earnings on equity securites.
Buildings
815,000 x
Cash
815,000 x
To record satisfaction of restriction on donation.
Net assets with donor restrictions-Reclassifications out -Satisfaction of purpose restrictions
675,000 x
Net assets without donor restrictions - Reclassifications in - Satisfaction of purpose restrictio +
675,000 x
To record payment for purchase of building.
Transcribed Image Text:Ref. Description Debit Credit 1 Contributions receivable 200,000 v Allowance for uncollectible pledges 20,000 Contributions revenue-Support without donor restrictions 180,000 v 2 Cash 190,000 v Allowance for uncollectible pledges 0 x Contributions revenue-Support without donor restrictions Net unrealized/realized investment gains/losses - with donor restrictions 0 x Cash 5,000 v Contributions revenue-Support with donor restrictions 5,000 v 4 Cash 675,000 v Contributions revenue-Support with donor restrictions 675,000 Investments 20,000 v Cash 20,000 v To record investment in equity securities. Cash 1,000 v Investment income without donor restrictions 1,000 v To record receipt of earnings on equity securites. Buildings 815,000 x Cash 815,000 x To record satisfaction of restriction on donation. Net assets with donor restrictions-Reclassifications out -Satisfaction of purpose restrictions 675,000 x Net assets without donor restrictions - Reclassifications in - Satisfaction of purpose restrictio + 675,000 x To record payment for purchase of building.
Administrative expenses
5,000 v
Fundraising expenses
3,000 v
Net assets with donor restrictions
8,000 v
8
Cash
45,000 x
Contributions revenue-Support with donor restrictions
45,000 x
Investments
22,000 x
Investment income without donor restrictions
22,000 x
10
Net assets without donor restrictions
35,000 v
Net assets without donor restrictions - board designated for equipment acquisition
35,000 v
Transcribed Image Text:Administrative expenses 5,000 v Fundraising expenses 3,000 v Net assets with donor restrictions 8,000 v 8 Cash 45,000 x Contributions revenue-Support with donor restrictions 45,000 x Investments 22,000 x Investment income without donor restrictions 22,000 x 10 Net assets without donor restrictions 35,000 v Net assets without donor restrictions - board designated for equipment acquisition 35,000 v
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