Question

What are GAAP requirements for preparing financial statements?

Use the following adjusted trial balance for Decatur Health Clinic to Create a statement of financial position, statement of functional expenses, statement of activities, and statement of cash flows

Decatur Health Clinic
Adjusted Trial Balance
As of June 30, 20X7
		Debits	Credits
Cash		150,500
Pledges Receivable-Unrestricted		36,000
Estimated Uncollectible Pledges			2,300
Inventory		2,800
Investment		178,000
Furniture and Equipment		210,000
Accumulated Depreciation-Furniture and Equipment			125,000
Accounts payable			20,520
Unrestricted Net Assets			206,500
Temporarily Restricted Net Assets			61,300
Permanently Restricted Net Assets			140,000
Contributions-Unrestricted			348,820
Contributions-Temporarily Restricted			38,100
Investment Income-Unrestricted			9,200
Net Assets Released from Restrictions-
	Temporarily Restricted	22,000
Net Assets released from Restrictions-
	Unrestricted		22,000
Salaries and Fringe Benefit Expense		288,410
Occupancy and Utility Expense		38,400
Supplies Expense		6,940
Printing and Publishing Expenses		4,190
Telephone and Postage Expense		3,500
Unrealized Gain or Investments			2,000
Depreciation Expense		35,000
	Totals	975,740	975,740

. Prepare all financial statements as of June 30, 20X7 including the following transactions.

There were five functional expense categories, which salaries and fringe benefits totaling $288,410 were allocated to with the following percentages: counseling services, 30%; professional training, 25%; community service, 15%; management and general, 20%; and fund-raising, 10%.

Occupancy and utility, supplies, printing and publishing, and telephone and postage expense were allocated to the programs using the same allocation procedures.

The five expense categories received equal amounts of depreciation expense. Decatur Health Clinic had $162,150 of cash on hand at the beginning of the year and received cash from contributors of $305,200, which was unrestricted. $38,100 was restricted for the purchase of a machine for the clinic.

Income earned and received on long- term investments was $9,200.

The purchase of the machine for the clinic was $22,000 and $82,500 for operating expenses.

Net pledges receivable increased $6,000, inventory decreased $1,000, accounts payable decreased $102,500, and there were no salaries payable at the beginning of the year.

Answer 1