Accounting For Governmental & Nonprofit Entities
18th Edition
ISBN: 9781259917059
Author: RECK, Jacqueline L., Lowensohn, Suzanne L., NEELY, Daniel G.
Publisher: Mcgraw-hill Education,
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Question
Chapter 13, Problem 21EP
To determine
Fir the given transactions indicate if the not for profit organization is at risk of getting intermediate sanctions.
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Theresa Johnson does volunteer work for a local not-for-profit entity as a community service. She replaces without charge an administrator who would have otherwise been paid $31,000. Which of the following statements is true? Choose the correct.a. The charity should recognize a restricted gain of $31,000.b. The charity should recognize a contribution of $31,000 as an increase in unrestricted net assets as well as salary expense of $31,000.c. The charity should recognize a reduction in expenses of $31,000.d. The charity should make no entry.
To send a mailing, a private not-for-profit charity spends $100,000. The mailing solicits donations and provides educational and other information about the charity. Which of the following is true? Choose the correct.a. No part of the $100,000 can be reported as a program service expense.b. Some part of the $100,000 must be reported as a program service expense.c. No authoritative guidance exists, so the organization can allocate the cost as it believes best.d. Under certain specified circumstances, the organization should allocate a portion of the $100,000 to program service expenses.
A donor gave $75,000 to a nongovernmental, not-for-profit charity with instructions that s be transferred to Sam Smith, an individual who lost his home in a fire.
The not-for-profit w A) A. Record the $75,000 cash and credit revenue with donor restrictions. B) B. Record the $75,000 cash and credit a liability. C) C. Not record
the transaction, because the money is going directly to the intended D) D. Do either of the choice A or B, depending upon the policy of the not-for-profit.
Chapter 13 Solutions
Accounting For Governmental & Nonprofit Entities
Ch. 13 - Prob. 1QCh. 13 - Prob. 2QCh. 13 - Prob. 3QCh. 13 - Prob. 4QCh. 13 - Prob. 5QCh. 13 - Prob. 6QCh. 13 - Prob. 7QCh. 13 - Prob. 8QCh. 13 - Prob. 9QCh. 13 - Prob. 10Q
Ch. 13 - Jan and Dean decided to form a charitable...Ch. 13 - Prob. 17.2EPCh. 13 - Prob. 17.3EPCh. 13 - Prob. 17.4EPCh. 13 - Prob. 17.5EPCh. 13 - Prob. 17.6EPCh. 13 - Prob. 17.7EPCh. 13 - Prob. 17.8EPCh. 13 - Prob. 17.9EPCh. 13 - When a tax-exempt organization dissolves, the...Ch. 13 - Prob. 18EPCh. 13 - Use Illustration 13-4 as a guide in completing...Ch. 13 - Prob. 20EPCh. 13 - Prob. 21EPCh. 13 - Prob. 22EP
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- Kanlungan, Inc., is a registered non-stock, non-profit entity with the purpose of helping the poor mainly by gathering donations from benevolent donors and distributing the same to the needy. On one occasion, Kanlungan, Inc., used a certain amount of donation to purchase a commercial stall. Kanlungan designated some of its staff to operate the commercial stall to generate income to boost the funds of the organization. Is the income from the stall taxable? a. No, as long as it is used for the main purpose of the organization. b. No, as long as the organization is tax exempt, its transactions remain tax exempt as well. c. Yes, the income is from an unrelated source hence, taxable. d. Answer not given.arrow_forwardUrban Hospice (UH) is a not-for-profit organization. It receives some funding from the government, but most of its funding comes from donations and bequests. It uses the deferral method to account for contributions and an encumbrance system to control expenditures. For simplicity, UH accounts for all of its activities through an operations fund. UH has provided the following selected transactions for the current year: a. At the beginning of the year, UH unexpectedly received $1,000,000 from the government to purchase three monitoring machines. UH immediately purchased the machines. Since UH purchased the machines as soon as the funds were received, it did not prepare a purchase order for them. At the end of the year, UH took depreciation of $200,000 on the machines. b. UH's annual Christmas fundraising gala generated $3,011,000 in cash and $820,000 in pledges. Based on previous years' experiences, UH estimates that 85 percent of the pledges will be collected in the first three months…arrow_forwardA voluntary health and welfare entity receives a gift of new furniture having a fair value of $2,100. The group then gives the furniture to needy families following a flood. How should the charity record receipt and distribution of this donation? Choose the correct.a. Make no entry.b. Record contributed support of $2,100 and community assistance expense of $2,100.c. Recognize revenue of $2,100.d. Recognize contributed support of $2,100 and community expenditures of $2,100.arrow_forward
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