Question

The Joslyn Museum is a private, not-for-profit organization that exhibits “an eclectic collection of works beginning with Greek pottery and moving through Europe and into American Western art and finishing in the 20^th century” [www.joslyn.org.]

The Museum has a fiscal year end of December 31^st.

On January 1, 2017 the Statement of Financial Position had the following amounts:

Cash $8,000,000 (debit)

Unrestricted Net Assets $7,000,000 (credit)

Restricted by Donors Net Assets $1,000,000 (credit)

During the year 2017, the following events happened:

Cash that was received last year, and was Restricted by Donors, was spend on a new art piece in 2017. The cost was $600,000.

Cash, that was NOT restricted by donors of $1,000,000 was received in 2017.

Required:

Record the two transactions above in journal entry form.

Prepare a Statement of Activities for the year 2017.

Prepare a Statement of Changes in Net Assets for 2017.

Prepare a Statement of Financial Position (balance sheet) as of December 31, 2017.

Answer 1

Journal Entry

1	Restricted by Donor	600000
	Released from restriction		600000
2	Programme Expenses	600000
	Cash		600000
3	Cash A/c	1000000
	Unrestricted by donor		1000000

Statment of Activities (SOA)

	Unrestricted	Restricted	Total
Contribution	1000000	-	1000000
Released from restrictions	600000	(600000)	-
Total Unrestricted Revenue	1600000	(600000)	1000000
Programme Expenses	600000	-	600000
Total Expenses	600000	-	600000
Change in Net Assets	1000000	(600000)	400000

Statment of change in Net Assets

	Unrestricted	Restricted	Total
Net Assets @ Begining of year	7000000	1000000	8000000
Change in Net Assets (from SOA)	1000000	(600000)	400000
Net Assets @ End of year	8000000	400000	8400000

Statment of financial Position

Assets
Cash	8400000
Total Assets	8400000
Liabilities & Net Assets
Liabilities	0
Net Assets
Without Donor Restriction	8000000
With Donor Restriction	400000
Total Net Assets & Liabilities	8400000