Prepare journal entries to record the transactions of the Kiterup Winter Sports Association for the year ended June 30, 2016. Closing entries are not required.
On January 1, 2016, some residents of the community of Kiterup, B.C., formed the Kiterup Winter Sports Association (KWSA) which was organized as a not-for-profit organization which has as its purposes encouraging participation in outdoor winter sports. In its first year, the board decided to restrict its activities to ice skating and skiing.
Initial funding was provided by a wealthy individual who made an endowment contribution of $200,000 which was invested in bonds and generated income during the year of $8,000. The donor placed no restrictions on the use of the income produced by the investment of the endowment contribution which were to be divided evenly between all programs undertaken by the Association.
During the year donations of $750,000 were received and a further $150,000 of pledges was outstanding of which the board estimated $130,000 would be collected. It was agreed that such donations, all of which were unrestricted, would be divided evenly between the skating and skiing programs. As a practical matter, donations not yet received at year-end were considered to be restricted for use in the following year. A special fund drive was undertaken to raise money to provide skates to needy youngsters and skiing equipment to needy senior citizens. During the year $25,000 was received in contributions for skates and $15,000 for contributions towards purchasing skis.
During the year ended December 31, 2016, the organization incurred the following costs.
At December 31, 2016, the only outstanding payables were for $30,000 relating to the skiing program (the costs are included in the table above). The ice skates and skiing equipment were paid for out of the funds raised by the special fund drive and were expensed as acquired.
KWSA does not use fund accounting but uses the deferred contribution method to account for restricted donations and uses programmatic reporting to report the results of its activities.
What will be an ideal response?
You might also like to view...
In the United States, people from various regions use different words when referring to Coca-Cola, such as soda, pop, soda pop, for example. These word choices refer to the __________ of a region.
a. dialect b. syntax c. accent d. language
In the general ledger, which of the following indicates posting from the sales journal?
a. J1; b. P2; c. CR5; d. CP3; e. S2
It is realistic to assume that a total revenue line will be straight rather than curved
Indicate whether the statement is true or false
Which of the following is not true regarding stock rights?
a. U.S. GAAP does not require recognition of the rights on the date of the grant. b. Firms often issue stock rights to raise new capital from current employees. c. Shareholders may exercise the stock rights or sell them to others. d. IFRS does not require recognition of the rights on the date of the grant. e. When holders exercise the stock rights, the firm records the issue of shares at the price paid just as it records the issue of new shares for cash.