Question

As of December 31, 2016, the accounts of the Middletown Youth Center contained the following balances:

Accounts payable	$13,520
Cash	126,500
Furniture and equipment, net of accumulated depreciation of $160,000	50,000
Inventory	2,800
Investments	178,000
Permanently restricted net assets	100,000
Temporarily restricted net assets	76,600
Unrestricted net assets	167,180

During 2017, the following activities took place:

1. Unrestricted contributions of $395,000 and temporarily restricted contributions of $50,000 were received in cash.
2. Investment income in the form of interest was received in the amount of $7,200.
3. Temporarily restricted net assets of $10,000 were released from their restrictions due to meeting the donor’s requirements.
4. The following expenses were incurred. All but $4,000 were paid in cash:
   1. Counseling services       139,976
   2. Professional training        55,116
   3. Community service          38,144
   4. General administration    91,060
   5. Fundraising                      38,144

   Total                 362,440

5. Additional equipment of $22,000 was purchased by paying $7,000 down and issuing a note payable for the rest.
6. Depreciation expense of $5,000 was recorded and allocated as follows: 50% to general administration, 20% to professional training, and 10% each to counseling services, community service, and fundraising.
7. All outstanding accounts payable at the beginning of the year were paid.
8. Inventory and investments remained unchanged during the year.

Instructions

Use the Excel template for Question 41 that you downloaded from this module to prepare a statement of activities for the year ended December 31, 2017. In addition, discuss how the new accounting standards (ASC 958) could impact this statement.

Formatting Example
City of Mayberry
Statement of Activities
For the Year Ended December 31, 2017
		Unrestricted	Temporarily Restricted	Permanently Restricted	Total
Revenues
	Contributions	$       485,000.00	$         51,611.00		$       536,611.00
	Investment Income	$           9,522.00			$           9,522.00
	Total Revenues	$       494,522.00	$         51,611.00		$       546,133.00

Answer 1

Below is the excel template of statement of activities:

Statement of Activities:
Activity	Unrestricted	Temporarily Restircted	Permanently Restricted	Total
Contributions	3,95,000	50,000		4,45,000
Investment Income	7,200			7,200
Total Revenues	4,02,200	50,000	0	4,52,200
Category	31.12.2016	Additions	Deletions	31.12.2017
Accounts Payable	13,520	4,000	-13,520	4,000
Cash	1,26,500	2,83,940	3,60,440	50,000
Furniture	50,000	22,000	-5,000	67,000
Inventory	2,800			2,800
Investments	1,78,000			1,78,000
Permanently restricted assets	1,00,000			1,00,000
Temporarily restricted assets	76,600	50,000		1,26,600
Unrestricted Net Assets	1,67,180	4,02,200	-2,83,940	2,85,440
Total	7,14,600	7,62,140	57,980	8,13,840

With amendment to ASC 958, the entity cannot recognize temporary and permanently restricted donations as its revenue unless the conditions mentioned for the donations by the donator are not complied.