(Get Answer) – E 2-3a. a newly established not-for-profit organization engaged in
E 2-3a. A newly established not-for-profit organization engaged in the following transactions:
1. A donor pledged $1,000,000, giving the organization a legally enforceable 90-day note for the full amount
2. The donor paid $300,000 of the amount pledged
3. The organization purchased a building for $600,000, paying $120,000 and giving a 30-year mortgage note for the balance. The building has a 30-year useful life. When appropriate, the organization charges a full year’s depreciation in the period of acquisition
4. It hired employees. By the end of the period they had earned $4,000 in wages, but had not yet been paid.
The organization accounts for its activities in a single fund
a. Prepare journal entries to record the transactions, making the following alternative assumptions as to the organizations measurement focus: cash only, cash plus other current financial resources, all economic resources
E 2-6. For each of the following transactions, indicate the fund in which each transaction would most likely be recorded:
a. The city collects $3 million of taxes on behalf of the county in which it is located.
b. It spends $4 million to pave city streets, using the proceeds of a city gasoline tax dedicated for road and highway improvements.
c. It receives a contribution of $5 million. Per the stipulation of the donor, the money is to be invested in marketable securities and the interest from the securities is to be used to maintain a city park.
d. It collects $800,000 in landing fees at the city-owned airport.
e. It earns $200,000 on investments set aside to make principal payments to the city’s outstanding bonds. The bonds were issued to finance improvements to the city’s tunnels and bridges.
f. It pays $4 million to a contractor for work on one of these bridges.
g. It pays $80,000 in wages and salaries to police officers.
h. It purchases from an outside supplier $40,000 of stationery that it will “sell” to its various operating departments.