NFP C is an organization that has a September 30 fiscal year-end and follows the accrual basis
Question:
NFP C is an organization that has a September 30 fiscal year-end and follows the accrual basis of accounting. Its account balances as of September 30, 2021, were as follows:
Cash $120,000
Pledge Receivable (restricted for use in FY 2021-22) $75,000
Prepaid Insurance (thru December 2021) $2,000
Furniture (5-year useful life) $20,000
Accumulated Depreciation – Furniture $12,000
Equipment (3-year useful life) $18,000
Accumulated Depreciation – Equipment $6,000
Salaries Payable $22,000
Accounts Payable $17,000
Net Assets without Donor Restrictions $103,000
Net Assets with Donor Restrictions $75,000
The following transactions are entered into by NFP C during the first quarter of Fiscal Year 2021-22 (the three months ended December 31, 2021). For each transaction, you’ve been provided with journal entry information that is either incomplete or that contains one or more errors. Provide the necessary correction(s) so that the journal entry information properly reflects the transaction.
NFP C has a three-year office lease, for $5,000 a month, that commenced on January 1, 2021. Payments are made by electronic funds transfer (cash) on the 1st day of each month for that month’s rent.
Dr. Rent Expense $15,000
Cr. Rent Payable $15,000
Valuation The Art and Science of Corporate Investment Decisions
ISBN: 978-0133479522
3rd edition
Authors: Sheridan Titman, John D. Martin