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In: Accounting

The Evangelical Private School follows FASB standards of accounting and reporting. 1. Cash contributions were received...

The Evangelical Private School follows FASB standards of accounting and reporting.

1. Cash contributions were received as follows: (a) $1,113,000 for any purpose desired by the school, (b) $305,000 for salary supplements for school faculty, (c) $421,000 to be used during the next fiscal year in any manner desired by the school, (d) $610,000 for the construction of a new auditorium, and (e) $408,000 to be invested permanently, with the income to be used as desired by the school. The school’s policy is to record all restricted gifts as temporarily restricted and then reclassify when the restriction is lifted.

2. The school expended $400,000 of the $1,113,000 mentioned in 1(a) for school furniture. Record the plant as unrestricted.

3. The school expended $284,500 for salary supplements as directed by the donor in 1(b).

4. The $421,000 in 1(c) was retained for use next year, as directed by the donor.

5. $790,000 was expended for the construction of the new auditorium. School policy is to record all plant as unrestricted.

6. The $408,000 mentioned in 1(e) was invested permanently, as directed by the donor, and in the year ended June 30, 2017, the school received interest of $19,380, none of which was expended.


Required:
Record journal entries for the above transactions during the year ended June 30, 2017. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

a. Record the entry for cash contributions for unrestricted fund.

b. Record the entry for cash contributions for salary payment to school faculty.

c. Record the entry for cash contributions for temporarily restricted fund.

d. Record the entry for cash contributions for construction of new auditorium.

e. Record the entry for cash contributions for permanently restricted fund.

f. Record the entry for cash purchase of school furniture.

g. Record the entry for payment salary.

h. Record the entry for expiration of program restrictions.

i. Record $421,000 that will be reclassified at the beginning of next year as the expiration of time restrictions.

j. Record $790,000 that was expended for the construction of the new auditorium.

k. Record the entry for expiration of fixed asset acquisition restrictions.

l. Record the entry for cash investments.

m. Record the entry for receipt of interest income.

Solutions

Expert Solution

Debit Credit
a CASH $        1,113,000
CONTRIBUTIONS-UNRESTRICTED $        1,113,000
b Cash $            305,000
CONTRIBUTIONS-TEMPORARILYRESTRICTED(PURPOSE RESTRICTIONS) $            305,000
c Cash $            421,000
CONTRIBUTIONS-TEMPORARILYRESTRICTED(TIME RESTRICTIONS) $            421,000
d Cash $            610,000
CONTRIBUTIONS-TEMPORARILY RESTRICTED (FIXED ASSET RESTRICTIONS) $            610,000
e Cash $            408,000
CONTRIBUTIONS-PERMANENTLYRESTRICTED $            408,000
f Furniture and equipment $            400,000
Cash $            400,000
g Salary Expense $            284,500
Cash $            284,500
h Temporary restriction $            284,500
Satisfaction of program restrictions $            284,500
i No entry, $421000 will be reclassified at the beginning of the nest year as expiration of time restriction
j Building (Auditorium) A/c $            790,000
Cash $            790,000
k Temporary restriction $            790,000
Satisfaction of program restrictions $            790,000
l Investment A/c Dr $            408,000
Cash $            408,000
m Cash A/c Dr. $              19,380
Interest Income $              19,380

ekkarill92 answered 1 year ago
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