The Southside Counseling Center was established on January 10, 2013, to provide a variety of counseling services to community residents, including marital and family counseling and treatment for alcoholism and drug abuse. The center's initial resources were provided by a private foundation in the form of a $1,000,000 capital grant. Of this sum, the foundation designated $500,000 for building and equipment and $250,000 for the establishment of a special program for counseling parolees. The following transactions occurred during 2013:
1. Contributions of $800,000 were received through the local United Way campaign, and an additional $130,000 was received in direct contributions. Of the direct contributions, $10,000 was for the parolees' program and $30,000 was for the building fund; the remaining $90,000, of which $40,000 was in the form of pledges, expected to be 75 percent collectible, was unrestricted.
2. Operating expenses for the year were $930,000, of which $850,000 had been paid by year-end.
3. The special parolees' program had not yet begun as of December 31, 2013. All resources dedicated to this program were invested in short-term securities. Investment income for the year, which was reinvested, was $20,000.
4. The center purchased a building for $2,200,000 ($1,800,000 is owed on the mortgage at year-end) and equipment for $240,000, of which $140,000 is owed on a three-year note. The initial $500,000 capital grant was used.
Required
a. Prepare journal entries to record the transactions for 2013.
b. Prepare Southside's statement of activities for 2013 and its statement of financial position at December 31, 2013?