Assume that The Sandy Creek Nature Center, a private not-for-profit organization, started the fiscal year ending December 31, 2017 with $59,378 in temporarily restricted net assets. The amounts are restricted for the following: •restricted for educational programs relating to preservation of wetlands $18,000.•restricted for future equipment purchases $16,000 (Fixed assets are recorded as unrestricted when acquired) and •a promise to provide $5,000 each of the next six years for general support. Assume the pledge was made on December 31, 2016 and the present value of six (January 1) payments discounted at 5 percent is $25,378.  During the fiscal year ended December 31, 2017, the following transactions occur:(a)The first $5,000 installment on the pledge receivable was

received.(b)Expenses related to educational programs on conservation of wetlands were incurred and paid in the amount of $19,900  (c)The $18,000 received in a prior year for equipment, together with an additional $25,500 was used to acquire equipment.(d)Interest of 5% is recorded on the remaining balance of the pledge receivable.Required: Prepare the journal entries necessary for the above transactions:

What will be an ideal response?

 

?DebitsCredits
 Accounts
(a)Cash5,000 
  Contributions Receivable5,000
Reclassifications from Temporarily Restricted Net Assets-5,000
  Expiration of Time Restrictions 
   Reclassification to Unrestricted Net Assets-Expiration of
  Time Restrictions5,000
 (to record expiration of time restrictions)

(b)Education Programs Expense19,900
  Cash 19,900
 Reclassification from Temporarily Restricted Net Assets-
  Satisfaction of Program Restrictions18,000
   Reclassification to Unrestricted Net Assets-Satisfaction
  of Program Restrictions18,000
 (to record expiration of program restrictions)
Equipment43,500
  
(c)  Cash43,500
 Reclassification from Temporarily Restricted Net Assets-
  Satisfaction of Equipment Acquisition Restrictions16,000
   Reclassification to Unrestricted Net Assets-Satisfaction
  of Equipment Acquisition Restrictions16,000
 (to record expiration of plant acquisition restrictions)

(d)Pledges Receivable1,019 
  Contribution Revenue-Temporarily Restricted1,019
 (Adjusting entry-December 31, 2017: ($25,378-5,000) * 5%

Business

You might also like to view...

When a life insurance policy contains a guarantee that the company that purchased the policy is entitled to a return equal to the amount of the cash surrender value of the policy, a portion of the premium is recorded to a long term liability account

Indicate whether the statement is true or false

View
Business

Organizations can lock in suppliers either by making it difficult to switch to another organization or by ________.

A. increasing the complexity of their products B. reducing investments in their supply chain C. making it easy to work with the organization D. increasing the margin on their products E. reducing the bargaining power of consumers

View
Business

You must decline an employee's request to telecommute three days per week. Which of the following statements best explains why this bad news is necessary?

A) Our current company policy does not allow telecommuting. B) Unfortunately, we regret that we are unable to afford the expenses associated with telecommuting. C) Your daily presence in the office is important to ensure regular customer contact. D) Your work standards cannot be relied on unless we are able to observe you at your workstation.

View
Business

The right to petition for bankruptcy relief under federal law is an essential aspect of our capitalistic society

Indicate whether the statement is true or false

View
Business