Assume that this entity charges its members $100,000 each year (Year 1 and Year 2). The members get nothing in return for their dues. The entity consistently records the cash collections as an increase in cash and an increase in exchange revenues under net assets without donor restrictions. The board of trustees approved a policy several years ago that 10 percent of the money collected from membership fees be set aside and invested with the money held for emergency purposes. Cash is decreased and "investments held for emergencies" are increased with each purchase.

Required: What is the appropriate amount of net assets without donor restrictions at the end of Year 1? 

What is the appropriate amount of net assets without donor restrictions at the end of Year 2? 

Answer rating: 100% (QA)

To determine the appropriate amount of net assets without donor restrictions at the en... View the full answer