The objective of this exercise is to familiarize you with the audited nancial statements and IRS Form

The objective of this exercise is to familiarize you with the audited financial statements and IRS Form 990 of a Nonprofit Entity, the American Cancer Society (www.cancer.org). Obtain the audited financial statements for the fiscal year ended Dec. 31, 2010 and Form 990 for 2010. Form 990 can also be obtained from www.Guidestar.org (Hint: Please make sure that the financial statements and Form 990 are for the same entity).

Respond to the following:

1. Identify the different kinds of receivables presented in the statement of financial position. Is the detail the same as that presented on Form990? What additional information have you been able to obtain from Form 990?

2. Calculate the program ratio (Total Program expenses/Total expenses) based on the financial statements and the 990. Do the ratios differ? Why and by how much?

3. The 990 Schedule A identifies the reason for the American Cancer Society’s status as a public charity. What reason is identified?

4. What is the rating of this Nonprofit by Charity Navigator or Better Business Bureau Wise Giving Alliance or other watch dog agencies? Explain what this means.