Below are the complete set of published financial statements taken from the annual report of the Hillsdale Museum. The statements do not comply with generally accepted accounting principles for private not-for-profits in a number of ways. Review these statements and describe instances in which the statements fail to comply with accepted accounting standards. You must be able to justify your assertions - for example you cannot say they failed to capitalize leases if there is no evidence they have a qualifying lease.Example: (1) The financial statements contain no note disclosures. The notes are an integral part of the financial statements and many individual disclosures are required under FASB standards.HILLSDALE MUSEUMSUMMARY OF OPERATING RESULTS ANDCHANGES IN FUND NET ASSETSYEAR
ENDED JUNE 30, 2017Operating Revenues:Charges for Services150,000Unrestricted Gifts100,000 Gifts restricted for Scholarships50,000 Total Operating Revenues$300,000 Operating Expenses: Salaries$100,000Utilities50,000Supplies80,000Depreciation40,000Total Operating Expenses270,000Operating Income30,000Nonoperating Income (Expenses):Gifts for Endowments36,000Change in Net Assets66,000HILLSDALE MUSEUMSTATEMENT OF FINANCIAL POSITIONJUNE 30, 2017Assets:Current Assets: Cash$214,000 Supplies20,000Total Current Assets 234,000Noncurrent Assets:Land 100,000Land Improvements$400,000Less: Accumulated Depreciation(20,000)380,000Equipment200,000Less: Accumulated Depreciation(20,000)180,000Total Fixed Assets660,000Endowment Investments300,000 Total Noncurrent Assets 960,000Total Assets $1,194,000Liabilities:Current Liabilities: Accounts Payable50,000 Current portion of Long Term Debt50,000 Total Current Liabilities 100,000Long-Term Liabilities: Bonds Payable 600,000Total Net Assets $594,000
What will be an ideal response?
| a. | The statements contain no Statement of Cash Flows as required under FASB |
| b. | The "Summary of Operating Results" should be titled "Statement of Activities" |
| c. | The Statement of Activities does not articulate with the Statement of Financial |
| d. | "Endowment Investments" appear on the Statement of Financial Position and "gifts to |
| e. | "Gifts restricted for operations" appear among the revenues, suggesting the existence |
| f. | Expenses are to be classified as Program or Supporting either on the face of the |
| g. | Change in Net Assets is to be separately reported for the 3 classes of net assets in the |
| h. | The statements fail to reflect any reclassification of net assets from temporarily |
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