(500 Words + Journal Entries)
Your city has a voluntary health
and welfare organization (VHWD) that provides musical opportunities for
inner-city youth. It does not use fund accounting, but it does identify
all revenues by their net asset class. The following transactions have
occurred in the past year:
- The VHWD received gift pledges
from donors in the amount of $25,000, which were to be used however they
were needed. History shows that 95% of the pledges were collected.
- After 1 month, $24,000 of the pledges was collected. There was $1,000 written off as uncollectible.
VHWD received a gift of 1,000 shares of stock. The donor of the gift of
shares stated that the money was to be used to buy musical instruments
for the program.
- Fair value of the stock on the date of the gift was $15 per share.
- Sale of the stock yielded $17,000.
VHWD purchased 2 violins at the cost of $2,000 each, 2 cellos for
$3,000 each, and a small harp for $5,000 for the program, using the
proceeds from the stock sale.
- The VHWD billed the city for $5,000 of contracted costs.
- The VHWD spent $10,000 on the following:
make a journal entry for each of the transactions. Remember that the
revenues must be classified as unrestricted, temporarily restricted, or
permanently restricted. The main areas for information on financial
reporting for not-for-profit organizations (NFPOs) and VHWOs can be
found in Financial Accounting Standards Board (FASB) statements 116 and
117. For your VHWO, you will have to make an additional report that is
not required for NFPOs.
Provide examples of the types of information that would be included in this report.