All facts about this NFPO are identical to those described in Problem 2, except that the association wants to use the deferral method of accounting for contributions. The centre will continue to use the three separate funds.

Required

Prepare a statement of financial position and statement of operations for each of the three funds as at and for the year ended December 31, Year 5.

Problem 2:

The Perch Falls Minor Hockey Association was established in Perch Falls in January Year 5. Its mandate is to promote recreational hockey in the small community of Perch Falls. With the support of the provincial government, local business people, and many individuals, the association raised sufficient funds to build an indoor hockey arena and it also established an endowment fund for paying travel costs to tournaments on an annual basis. 

The following schedule summarizes the cash flows for the year ended December 31, Year 5.

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PERCH FALLS MINOR HOCKEY ASSOCIATION ($000s) Operating Fund Capital Fund Endowment Fund Cash inflows: $ 45 Government grant for operating costs Government grant for hockey arena Corporate donations for hockey arena Registration fees Contribution for tournaments $400 200 20 $35.0 Rental of hockey arena 40 Interest received 2.1 600 105 37.1 Cash outflows: Operating expenses Construction of hockey arena Purchase of corporate bonds 102 600 35.0 2.1 37.1 Travel costs for tournament 102 600 $ 3 Cash, end of year