NFP Journal Entry Project

NFP Journal Entry Project

Requirement:

A: Prepare journal entries to record each
of the following transactions occurring during the fiscal year ending June 30,
2010 assuming the organization follows the guidance of (A) SFAS #116 and #117
and (B) GASB Statements #34 or #35. For those organizations following FASB
guidance, you should prepare entries under the assumption that property, plant,
and equipment is considered to be unrestricted
resources.

B. Assume the organizations had equity
balances as follows at the beginning of the year. Calculate the balance in each
equity account for each NFP at the end fiscal year 2010, after all adjustments
and closing entries have been made.

NFP (under SGAS #34 or #35) NFP (Under SFAS #116
& #117)

1. Cash contributions were received as follows: (a) $1,000,000 for
   any purposes desired by the school, (b) $600,000 restricted by donors for
   research purposes, (c) 100,000 to be used during the next fiscal year in
   any manner the NFP sees fit. (d) 800,000 restricted by donors for the
   purchase of new equipment, and (e) $2,000,000 to be kept in perpetuity
   with half of all earnings to be spent for providing free meals to the
   elderly and half available for the NFP to spend as it sees fit.
2. The NFP spent $500,000 for the purchase of new equipment.
3. The NFP spent $350,000 for research.
4. The $2,000,000 to be kept in perpetuity was invested in
   marketable securities.
5. Earnings of $40,000 were received on the $2,000,000 endowment.
6. The $2,000,000 in marketable securities was sold at a gain of
   $100,000
7. The governing board of the NFP set aside $150,000 to be used
   for future land expansion.
8. A payment of $120,000 ($100,000 for principal reduction and
   $20,000 in interest) was made on a mortgage that had been signed five
   years ago when the NFP purchased its current office building.
9. Depreciation of $15,000 was recorded for the year.