Question

Hello, I am having trouble with my Advanced Accounting Ch 18 homework. Accounting for nonprofts. Here are a few questions: At the beginning of the year, Nutrition Now, a health and welfare not-for-profit entity, had the following equity balances: Net assets without donor restriction $400,000 Net assets with donor restriction $290,000

1. Unrestricted contributions (pledges) of $250,000, to be collected in cash in thirty days, before the end of the year, are received.

2. Salaries of $27,000 are paid with $3,000 of that amount coming from restricted funds

3. Equipment is bought for $85,000 by signing a long-term note for $30,000 and using restricted funds for the remainder.

4. A contribution (pledge) of $80,000 is received that will be collected in three years. Present
value is $68,000. Donors have not placed restrictions on the eventual use.

5. A donor gives $37,000 to the charity that must be conveyed to another not-for-profit when
the Board of directors decides which other organization should get the money.

show how each of the following transactions would affect the organization's equity balances.

Thank you

Answer 1

Organisation equity balance
Transaction	Particulars	Unrestricted	Restricted
0	Opaning Balance	$        4,00,000	$        2,90,000
1	Unrestricted contribution	$        2,50,000	$                     -
2	Salaries paid	$         (24,000)	$            (3,000)
3	Equipment bought	$                     -	$                     -	Note 1
4	Contribution pledge	$                     -	$                     -	Note 2
5	Donor Contibution	$                     -	$                     -	Note 3

Note Number
1	No effect as asset purchased
2	No effect untill recevied
3	No effect as it is libility not equity till BOD decides