Funds are separate fiscal and accounting entities, each with its own self-balancing set of accounts. The newly established Society for
Funds are separate fiscal and accounting entities, each with its own self-balancing set of accounts. The newly established Society for Ethical Teachings maintains two funds-a general fund for operations and a building fund to accumulate resources for a new building. In its first year, it engaged in the following transactions.
a. It received cash contributions of $200,000, of which $40,000 was restricted for the acquisition of the new building.
b. It incurred operating costs of $130,000, of which it paid $120,000 in cash.
c. It earned $3,000 of interest (the entire amount received in cash) on resources restricted for the acquisition of the new building.
d. It transferred $17,000 from the operating fund to the new building fund.
e. It paid $12,000 in fees (accounted for as expenses) to an architect to draw up plans for the new building.
1. Prepare journal entries to record the transactions. Be certain to indicate the fund in which they would be made.
2. Prepare a statement of revenues, expenditures, and other changes in fund balances and a balance sheet. Use a two-column format, one column for each of the funds?
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