Question

The Kare Counseling Center was incorporated as a not-for-profit voluntary health and welfare organization 10 years ago. Its adjusted trial balance as of June 30, 2020, follows.

	Debits				Credits
Cash	$	112,400
Pledges Receivable—Without Donor Restrictions		42,800
Estimated Uncollectible Pledges					$	5,900
Inventory		4,600
Investments		196,000
Furniture and Equipment		228,000
Accumulated Depreciation—Furniture and Equipment						129,000
Accounts Payable						22,320
Net Assets Without Donor Restrictions						198,300
Net Assets With Donor Restrictions—Programs						52,300
Net Assets With Donor Restrictions—Permanent Endowment						158,000
Contributions—Without Donor Restrictions						350,620
Contributions—With Donor Restrictions—Programs						42,000
Investment Income—Without Donor Restrictions						11,000
Net Assets Released from Restrictions—With Donor Restrictions		40,000
Net Assets Released from Restrictions—Without Donor Restrictions						40,000
Salaries and Fringe Benefit Expense		290,210
Occupancy and Utility Expense		40,200
Supplies Expense		8,740
Printing and Publishing Expense		5,990
Telephone and Postage Expense		5,300
Unrealized Gain on Investments						3,800
Depreciation Expense		39,000
Totals	$	1,013,240			$	1,013,240

1. Salaries and fringe benefits were allocated to program services and supporting services in the following percentages: counseling services, 40 percent; professional training, 20 percent; community service, 10 percent; management and general, 20 percent; and fund-raising, 10 percent. Occupancy and utility, supplies, printing and publishing, and telephone and postage expenses were allocated to the programs in the same manner as salaries and fringe benefits. Depreciation expense was divided equally among all five functional expense categories.
2. The organization had $174,814 of cash on hand at the beginning of the year. During the year, the center received cash from contributors: $303,100 that was unrestricted and $42,000 that was restricted for the purchase of equipment for the center. It had $11,000 of income earned and received on long-term investments. The center spent cash of $290,210 on salaries and fringe benefits, $40,000 on the purchase of equipment for the center, and $88,304 for operating expenses. Other pertinent information follows: net pledges receivable increased $5,000, inventory increased $3,200, accounts payable decreased $109,394, and there were no salaries payable at the beginning of the year.

1. Prepare a statement of expenses by nature and function for the year ended June 30, 2020.

Answer 1