Question: The Ford Historical Society is an NFPO funded by government

The Ford Historical Society is an NFPO funded by government grants and private donations. It uses both an operating fund and a capital fund. The capital fund accounts for moneys received and restricted for major capital asset acquisitions. The operating fund is used for all other activities.
The society uses the restricted fund method of accounting for contributions. An encumbrance system is used within the operating fund to ensure that expenditures made in any one year do not exceed the amounts budgeted. Donated materials and services are recorded if such items would have been purchased had they not been received as donations.
The following are some selected activities that took place during the current year:
• Purchase orders in the amount of $500,000 for goods and services were issued during the year.
• Pledges totaling $350,000 were made to the society, of which $150,000 applies to the operations of the following year. It is estimated that 3% of all pledges will be uncollectible.
• Pledges of $310,000 were collected, and pledges totaling $5,000 were written off.
• A government grant of $500,000 for acquisition and renovation of an office building for the society was approved by the government. All of the grant money was received except for the last 10%, which is expected to be received in the first month of the next fiscal year.
• Invoices for all of the goods and services ordered during the year were received. The total cost was $510,000, of which $480,000 was paid for by the end of the year.
• An old office building was acquired and renovated for a cost of $500,000. Amortization expense on the office building was $10,000.
• A local radio station donated free airtime to the society. The society saved the
$5,000 it would normally have paid for this airtime.
Prepare the journal entries required to record these activities, and indicate which fund each journal entry will be recorded in.

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  • CreatedJune 09, 2015
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