Question

The following information pertains to United Ways, a private voluntary health and welfare organization, for the year ended December 31, 20X3.

Balances in net assets at January 1, 20X3: Without Donor Restrictions$3,020,000

With Donor Restrictions 11,025,000

The following transactions occurred during the year ended December 31, 20X3:

1. Received cash donations of $508,000 from donors who did not place any time or purpose restrictions on them.
2. Received $1,019,000 of pledges from donors to be received in 20X4; it was estimated that 6 percent of the pledges would not be collected. Donors did not place any restrictions on the use of their pledges.
3. Earned investment income of $212,000 on endowment investments that donors permanently restricted for research activities.
4. Designated $227,000 of the $510,000 of cash donations received in 20X3 for computer acquisitions.
5. Spent $158,000 of the $212,000 of investment income earned on endowment investments on research during the year ended December 31, 20X3. (This amount is included in the $251,000 for research expenses shown in the following table.)
6. Acquired $117,000 of equipment from donations made in 20X2 that donors had restricted for that purchase. The governing board of United Ways reports acquisitions of capital assets as unrestricted.
7. Received donated audit services from the organization’s accounting firm that would have cost $16,400.
8. Learned that the fair value of endowment investments was $619,000 higher at the end of 20X3 than at the beginning. United Ways did not acquire or sell any endowment investments during 20X3 and treats gains and losses on endowment investments as permanently restricted.
9. Incurred program and supporting services expenses during 20X3 as follows (depreciation expense for 20X3 has been properly allocated to the functional expenses
10. Research$251,000 Public health education 101,400
11. Community services 149,700
12. Management and general (does not include the audit that was donated) 124,800
13. Fund-Raising 114,500

UNITED WAYS Statement of Activities For the Year Ended December 31, 20X3 Without Donor Restrictions With Donor Restrictions Total Revenues, gains and other support: Contributions $508,000 $508,000 Investment income 831,000 831,000 Donated services 16,400 16,400 Net assets released from restriction: Program use restrictions 158,000 (158,000) 0 Equipment acquisitions 117,000 (117,000) 0 Total revenues, gains and other support $799,400 $556,000 $1,355,400 Program and supporting services expenses: Research $251,000 $251,000 Public health education 101,400 101,400 Community services 149,700 149,700 Management and general 141,500 WRONG 141,500 Fund-raising 114,500 114,500 Total expenses $758,100 $0 $758,100 Change in net assets $41,300 $556,000 $597,300 Net assets, beginning of the year 3,020,000 11,025,000 14,045,000 Net assets, end of the year $3,061,300 $11,581,000 $14,642,300

Answer 1