At the beginning of 2011, the citizens of North Ptarmigan created Share Shop, a voluntary health and welfare organization. Share receives donations of money, nonperishable groceries, and household items from contributors. The food and household items are distributed free of charge to families on the basis of need. Share allocates expenses 80 percent to community services and 20 percent to management and general services, unless otherwise noted. Share has one paid administrator with a yearly salary of $14,600. An accountant donates accounting services to Share that have a fair value of $900 and are allocated to management and general. Work is also performed by regular volunteers whose services cannot be measured.
A local transit company has provided free warehouse space for the operations of Share Shop. Fair value of rent for the warehouse is $3,000 a year. Utilities of $1,800 are paid by Share for 2011.
During the year, Share purchased supplies for $300. At December 31, 2011, the supplies inventory was insignificant. Expenses incurred in determining which families were eligible for Share’s services and other accounting and reporting expenses totaled $6,000.
Donated assets for 2011 included nonperishable groceries with a fair value of $60,000 and household items with a fair value of $40,000. During the year, Share Shop distributed three-fourths of the groceries and half of the household items. No portion of these distributions was allocated to management and general services.
In addition to the donated assets, Share received cash donations of $10,000 and pledges of $20,000. Share estimated that 10 percent of the pledges would be uncollectible. At year-end 2011, $15,000 of the pledges had been collected. Share estimates that only $1,000 of the remaining pledges will be uncollectible.
The town council of North Ptarmigan made a $25,000 grant to Share Shop that will be paid in January 2012.
REQUIRED
Prepare summary entries for Share Shop for 2011.