Question

The Ombudsman Foundation is a private not-for-profit organization providing training in dispute resolution and conflict management. The Foundation had the following preclosing trial balance at December 31, 2020, the end of its fiscal year:

Trial Balance—December 31, 2020		Debits			Credits
Accounts payable				$	25,100
Accounts receivable (net)	$	47,700
Accrued interest receivable		16,700
Accumulated depreciation					3,459,300
Cash		117,300
Contributed services					27,000
Contributions—no restrictions					2,446,000
Contributions—purpose restrictions					796,000
Contributions—endowment					2,122,700
Current pledges receivable		80,800
Education program expenses		1,538,100
Fund-raising expenses		124,300
Investment revenue—purpose restrictions					92,500
Training seminars expenses		4,550,100
Land, buildings, and equipment		5,614,700
Long-term investments		2,743,500
Management and general expenses		408,600
Net assets without donor restrictions					487,400
Net assets with donor restrictions					2,047,000
Net gains on endowments - no restrictions					18,400
Noncurrent pledges receivable		390,200
Program service revenue - no restrictions					5,978,100
Post-employment benefits payable (long-term)					200,900
Reclassification—Satisfaction of program restrictions		267,400
Reclassification—Satisfaction of time restrictions		215,600
Reclassification—Satisfaction of program restrictions					267,400
Reclassification—Satisfaction of time restrictions					215,600
Research program expenses		1,282,700
Short-term investments		751,900
Supplies inventory		33,800
Totals	$	18,183,400		$	18,183,400

Required:
a. Prepare closing entries for the year-end, using separate entries for each net asset classification.
b. Prepare a Statement of Activities for the year ended December 31, 2020.
c. Prepare a Statement of Financial Position as of December 31, 2020.

Answer 1

Solution A

Closing Entries

Particular	Debit (in $)	Credit (in $)
Statement of Activities A/C Dr	79,03,800
To Education programme expenses		15,38,100
To fund raising expenses		1,24,300
To Training Seminar Expenses		45,50,100
To management and Genearal Expenses		4,08,600
To Research Programme Expenses		12,82,700
(Being expenses Transferred to Statement of Activities)
Net Gain on endowment investment - unrestricted A/C Dr	18,400
Program Service Revenue - unrestricted A/C Dr	59,78,100
Contributed Services Dr	27,000
Contributions - no restrictions A/C Dr	24,46,000
Contributions - purpose restrictions a/c Dr	7,96,000
Contributions - endowment A/C Dr	21,22,700
Investment Revenue - Purpose Restriction A/C Dr	92,500
To Statement of Activities A/C		1,14,80,700
(Being incomes transferred to statement of Activities)
Statement of Activities A/C Dr	35,76,900
To excess of Incomes over Expenditure (Balancing Figure)		35,76,900
(Being net surplus transferred to Balance Sheet)

Solution B

Statement of Activities during the Year ended December 31,2020
Expenditure	Amount (in $)	Incomes	Amount (in $)
To Educational Programme Expenses	15,38,100	By Net Gain on Endowment Investment - unrestricted	18,400
To Fund - raising Expenses	1,24,300	By Programme Service Revenue - Unrestricted	59,78,100
To Training Seminar Expenses	45,50,100	By Contributed Services	27,000
To Managment & General Expenses	4,08,600	By Contributions - no restrictions	24,46,000
To Research Programme Expenses	12,82,700	By Contributions - purpose restrictions	7,96,000
To Excess of Incomes over Expenditure (Balancing Figure)	35,76,900	By Contributons - Endowment	21,22,700
		By Investment Revenue - Purpose Restrictions	92,500
	1,14,80,700		1,14,80,700

Solution C

Statement of Financial Position as of December 31,2020

Liabilities	Amount ( in $)	Assets	Amount ( in $)
Excess of Incomes over Expenditure	35,76,900	Land, Buildings & Equipment 56,14,700
Accounts Payable	25,100	Less Acc. Depreciation 34,59,300	21,55,400
Postemployment benefits Payable (long - term)	200,900	Long term Investments	27,43,500
Other Liabilities		Noncurrent Pledges Receivables	3,90,200
Net Asets without donor Restrictions	4,87,400	Accounts Receivaable (net)	47,700
Net Assets with donor Restrictions	20,47,000	Accrued Interest Receivable	16,700
		Current Pledges Receivable	80,800
		Short - term Investments	7,51,900
		Supplies Inventory	33,800
		Cash	1,17,300
	63,37,300		63,37,300