Question

Recording Revenue and Related Expense Transactions. The Shannon Community Kitchen provides hot meals to homeless and low-income individuals and families; it is the organization's only program. It is the policy of the community kitchen to use temporarily restricted resources for which the purpose has been met before unrestricted resources. The Kitchen had the following revenue and expense transactions during the 2017 fiscal year. Unrestricted cash donations of $25,000 were received. A local philanthropist also contributed $3,000, which was to be used for the purchase of Thanksgiving dinner foodstuffs. A local grocery store provided fresh produce with a fair value of $100. The produce was immediately used. Volunteers from the local university contributed 100 hours to preparation and serving of meals. The estimated fair value of their labor was $750. The Kitchen received a $5,000 federal grant for the purchase of institutional kitchen appliances. At Thanksgiving time, the Kitchen spent $4,100 on foodstuffs for preparation of the Thanksgiving dinner Required Make all necessary journal entries to record these transactions

Answer 1

The Shannon Community Kitchen
General Journal
No.	Particulars	Debit	Credit
1	Cash	$ 28,000
	Contributions-Unrestricted		$ 25,000
	Contributions-Temporary Restricted		$   3,000
	(Being donations received in cash)
2	Program Expense	$       100
	Contributions-Unrestricted		$       100
	(Being fresh produce provided by grocery store received at fair value $100)
3	No-Entry
	Meal services and preparation does not require a specialized skill
4	Cash	$   5,000
	Contributions-Temporary Restricted		$   5,000
	(Being federal grant received for purchase of institutions kitchen appliances)
5	Program Expense	$   4,100
	Cash		$   4,100
	(Being $4,100 spent on foodstuff)
6	Net assets realised-satisfaction of purpose restriction-Temporary restricted	$   3,000
	Net assets realised-satisfaction of purpose restriction-Unrestricted		$   3,000
	(Being satisfaction of purpose restriction)