Started on Monday, 24 April 2023, 7:01 PM
State Finished
Completed on Monday, 24 April 2023, 8:13 PM
Time taken 1 hour 12 mins
Grade 84.45 out of XXXXXXXXXX%)
Question 1 Inco
ect Mark 0.00 out of 1.00
Unrealized gains and losses on which investments are reported as a change in net assets on a private NFP organization’s statement of activities?
Select one:
a. Investments in trading debt securities and all equity securities
. Investments in equity securities only
c. All investments in debt and equity securities except hedge investments
d. All investments in debt and equity securities
Question 2 Inco
ect Mark 0.00 out of 1.00
In the operating section of an NFP’s statement of cash flows, a reconciliation to cash from operating activities
Select one:
a. is not required if the indirect method is used.
. reconciles the change in net assets without donor restrictions to cash from operating activities.
c. reconciles the operating change in net assets to cash from operating activities.
d. is not required if the direct method is used.
Question 4 Inco
ect Mark 0.00 out of 1.00
In the net assets section of a private NFP organization’s statement of financial position, Board-designated endowment assets are reported in which
category?
Select one:
a. net assets with endowment restrictions
. net assets with permanent restrictions
c. net assets with donor restrictions
d. net assets without donor restrictions
Question 5 Partially co
ect Mark 5.19 out of 9.00
Reporting Promises
At the beginning of 2020, the Museum of History receives a documented promise to contribute $20,000 at the end of each year for the next fou
years. The appropriate discount rate is 3 percent, and the promise is considered fully collectible. At the end of 2020, the museum receives the first
payment.
Required
Prepare journal entries to record the promise and the first year’s contribution. If the museum’s net assets are affected, indicate the appropriate
category of net assets.
Round your answers to the nearest whole number.
Description Debit Credit
20,000 0
0 1,415
Contribution revenue - restricted 0 18,585
To record the present value of the documented promise.
558 0
0 558
To record interest earned on outstanding contributions receivable.
19,143 0
0 19,143
To record release of restriction.
5,000 0
0 5,000
To record donor's contribution for the year.
Contributions receivable
Discount on contributions receivable
Discount on contributions receivable
Contribution revenue-restricted
Net assets released from time restriction-restricted
Net assets released from time restriction-unrestricted
Cash
Contributions receivable
Question 7 Inco
ect Mark 0.00 out of 1.00
A private NFP health care organization reports estimated uncollectible portions of patient service revenue as
Select one:
a. unearned revenue.
. bad debt expense.
c. nonoperating expense.
d. a reduction in patient service revenue.
Question 8 Partially co
ect Mark 9.33 out of 11.00
University Transactions
San Rafael University’s transactions for the year include the following:
1. An alumna donates $10,000 in cash for the purchase of a subscription to tax research software.
2. An alumnus donates $1 million in cash, stipulating that income from its investment be used to support accounting club activities. Investment
income of $35,000 in cash is earned during the year, but not spent.
3. $50,000 in cash donated in a past year, that was donor-restricted to scholarships, is spent on scholarships for accounting students in the MS in
Accounting program.
4. $1.8 million in salaries are paid to accounting faculty.
5. Tuition scholarships of $100,000 are made to accounting students.
6. Tuition waivers of $100,000 are granted to graduate students who work as teaching assistants in the sophomore level accounting classes.
7. Student activity fees totaling $75,000, to be used to support the independent undergraduate and graduate accounting student organizations,
are collected with tuition payments.
8. Depreciation of $800,000 on the business school building is recognized.
9. A new student center, with study and classroom space, is constructed in the basement of the business school building, at a cost of $5 million in
unrestricted resources.
Required
Prepare journal entries to record each item. For accounts shown on the statement of activities, indicate the category of net assets affected.
Note: For Transactions 5 & 6, assumes full tuition already accrued.
Ref. Description Debit Credit
1 10,000 0
0 10,000
2 1,000,000 0
0 1,000,000
To record receipt of donation.
35,000 0
0 35,000
To record receipt of investment income
3 50,000 0
0 50,000
To record release of restrictions.
50,000 0
0 50,000
To record funds spent on scholarships.
4 1,800,000 0
0 1,800,000
5 100,000 0
0 100,000
6 100,000 0
0 100,000
7 75,000 0
0 75,000
8 80,000 0
0 80,000
9 5,000,000 0
0 5,000,000
Cash
Contribution revenue-restricted
Cash
Net assets released from time restriction-restricted
Cash
Net assets released from time restriction-unrestricted
Net assets released from use restriction-restricted
Net assets released from use restriction-unrestricted
Net assets released from use restriction-unrestricted
Net assets released from use restriction-restricted
Salaries expense
Cash
Liability to student organizations
Cash
Assistantship expense
Tuition revenue
Cash
Tuition receivable
Depreciation expense
Accumulated depreciation
Facilities
Cash
Question 9 Partially co
ect Mark 5.56 out of 10.00
Recognition of Contributions
The following events relate to Habitat for Humanity International’s activities. If appropriate, assume a discount rate of 3 percent per annum.
Expenditures for house building activities are categorized as program expense.
Required
In each case, identify (a) whether the item should be recorded as a contribution and (b) if recorded, prepare the journal entry or entries to record the
event. If net assets are affected, indicate the category of net assets affected.
NOTE: Round answers to the nearest whole number, when appropriate.
1. In a telephone solicitation, a potential donor says he will contribute $500 in 30 days.
Recorded? Amount Classification:
2. In a telephone solicitation, a potential donor requests that a pledge card be mailed, suggesting that a $250 contribution may be forthcoming.
Recorded? Amount Classification:
3. A potential donor makes a documented promise to contribute $100,000 when Habitat for Humanity has raised $100,000 in matching funds;
$40,000 in matching funds has been raised to date.
Recorded? Amount Classification:
4. Same as 3. except that the potential donor promises to contribute up to $100,000 by giving $1 for each $1 of matching funds raised.
Recorded? Amount Classification:
5. A group of college students helps build a house for Habitat for Humanity in inner city Los Angeles; Habitat for Humanity estimates the value of the
group’s services at $10,000.
Recorded? Amount Classification:
6. A donor contributes $15,000 in cash and signs an agreement to contribute $15,000 at the beginning of each of the next four years, to support
specific Habitat for Humanity projects.
a. Contribution received now Recorded? Amount Classification:
. Contributions received the next four years Recorded? Amount Classification:
7. A donor contributes $200,000, stating that half is to be used to restore and build houses in upstate New York this year, and half is to be used for the
same purpose next year.
(HINT: Complete answers considering the initial contribution only.)
Recorded? Amount Classification:
8. At the beginning of the year, a donor contributes a building worth $4,000,000 and requires that it be used to house Habitat for Humanity’s
administrative offices over the building’s 20-year remaining estimated useful life. Depreciation for the year is recorded as administrative expense.
(HINT: Complete answers considering the initial contribution only.)
Recorded? Amount Classification:
9. A registered plumber volunteers her services to install plumbing in several Habitat for Humanity houses. The plumber’s services are valued at
$5,000.
Recorded? Amount Classification:
10. A donor contributes $1,000,000 face value of 4 percent bonds as an endowment to Habitat for Humanity. Income generated from the bonds is to
e used to buy appliances for new houses. Donated between interest payment dates, the bonds’ $1,060,000 value includes accrued interest of
$25,000.
a. Fair value of bonds Recorded? Amount Classification:
. Accrued interest on bonds Recorded? Amount Classification:
Yes 500 $ Net assets with donor restrictions
No 0 $ N/A
Yes 100,000 $ Net assets with donor restrictions
Yes 40,000 $ Net assets with donor restrictions
Yes 10,000 $ Net assets without donor restrictions
Yes 15,000 $ Net assets without donor restrictions
Yes 60,000 $ Net assets with donor restrictions
Yes 200,000 $ Net assets with donor restrictions
Yes 4,000,000 $ Net assets with donor restrictions
No 0 $ N/A
Yes 1,060,000 $ Net assets without donor restrictions
Yes 25,000 $ Net assets with donor restrictions
Question 10 Inco
ect Mark 0.00 out of 1.00
In its annual report, private NFP organizations report expenses
Select one:
a. in natural classifications.
. in functional classifications.
c. in natural and functional classifications.
d. in either natural or functional classifications.
Question 11 Inco
ect Mark 0.00 out of 1.00
Net assets are recategorized from net assets with donor restrictions to net assets without donor restrictions for which one of the following reasons?
Select one:
a. Donor-designated resources are used for the designated purpose
. Increase in present value of a donor-restricted promise to contribute
c. Collection of restricted promised contributions
d. Increase in fair value of investments
Question 12 Partially co
ect Mark 6.00 out of 8.00
Donation of Goods and Services
Youth Villages provides housing and support for at-risk children. The following donations were received by Youth Villages during the year:
1. Supplies with a market value of $5,000 were received.
2. Volunteers spent a weekend cleaning facilities. The fair value of their time was $3,000.
3. CPAs contributed services valued at $10,000 to prepare financial statements and Form 990.
4. A contractor contributed services valued at $25,000 to build additional facilities.
Required
Prepare journal entries to record the events described for the cu
ent year. For accounts shown on the statement of activities, indicate the category of
net assets affected.
NOTE: If an event does not require a journal entry, select "No entry" as your answers.
Ref. Description Debit Credit
1 5,000 0
0 5,000
2 3,000 0
0 3,000
3 10,000 0
0 10,000
4 25,000 0
0 25,000
Supplies
In-kind contributions revenue—unrestricted
In-kind contributions revenue—unrestricted
Contributions of services—unrestricted
Contributions receivable
Contributions of services—unrestricted
Contributions receivable
Contributions of services—unrestricted
Question 13 Partially co
ect Mark 5.23 out of 8.00
Split-Interest Agreement
At the beginning of the cu
ent year, Pauline Doyle gave Rocky Mountain College $600,000 in cash, with the provision that the cash be invested in
income-producing securities. The college is to pay Pauline the income from the investments for her remaining life. Upon her death, remaining
esources become available to the college with no restrictions as to use. The college invested the $600,000 in securities earning dividend and interest
income of $17,000, received in cash. The securities have a fair value of $601,000 at the end of the year.
Required
Prepare journal entries to record the split-interest agreement during the cu
ent year. Investment income is defined as dividend and interest income
and unrealized gains and losses.
Description Debit Credit
600,000 0
0 600,000
To record contribution under the life income agreement.
600,000 0
0 600,000
To record investment.
Cash 18,000 0
0 16,000
0 1,000
To record the year's income andchange in fair value of investments.
1,000 0
0 1,000
To record income payment to the donor.
Cash
Contribution revenue-restricted
Investments
Cash
Contribution revenue-unrestricted
Contribution revenue-restricted
Investments
Cash
Question 14 Inco
ect Mark 0.00 out of 1.00
The following are some of the financial statements required in the State of New York ACFR:
1. Government-wide statement: statement of net position
2. Government-wide statement: statement of activities
3. Fund statement: balance sheet–governmental funds
4. Fund statement: statement of revenues, expenditures and changes in fund balances—governmental funds
5. Fund statement: statement of net position–proprietary funds
6. Fund statement: statement of revenues, expenses and changes in net position–proprietary funds
For each of the following balances related to the financial performance of the State of New York, indicate the number(s) of the statements on which
the balance is reported.
Personal income tax revenue
6 only
2 only
4 only
2 and 4
Question 15 Partially co
ect Mark 16.94 out of 18.00
Major Funds
Lenox County provides the following information on its governmental and enterprise funds:
Fund Assets Liabilities Revenues
Expenditures
Expenses
General fund $120,000 $108,000 $1,020,000 $1,174,500
Grants special revenue fund 82,500 65,250 300,000 145,500
Parks and recreation