Question: Help & Save is a private not-for-profit entity that operates in Kansas. Swim For Safety is a private not-for-profit entity that operates in Missouri. The
Help & Save is a private not-for-profit entity that operates in Kansas. Swim For Safety is a private not-for-profit entity that operates in Missouri. The leaders of these two organizations have decided to combine forces on January 1, 2017, in order to have a bigger impact from their work. They are currently discussing ways by which this combination can be created. Statements of financial position for both charities at that date appear below.
| HELP & SAVE Statement of Financial Position January 1, 2017 | ||
| Assets | ||
| Cash | $ | 1,690,000 |
| Contributions receivable (net) | 160,000 | |
| Investments | 390,000 | |
| Buildings & equipment (net) | 790,000 | |
| Total assets | $ | 3,030,000 |
| Liabilities | ||
| Accounts payable and accrued liabilities | $ | 119,000 |
| Notes payable | 1,190,000 | |
| Total liabilities | $ | 1,309,000 |
| Net Assets | ||
| Unrestricted | $ | 1,190,000 |
| Temporarily restricted | 412,000 | |
| Permanently restricted | 119,000 | |
| Total net assets | $ | 1,721,000 |
| Total liabilities and net assets | $ | 3,030,000 |
| SWIM FOR SAFETY Statement of Financial Position January 1, 2017 | ||
| Assets | ||
| Cash | $ | 599,000 |
| Contributions receivable (net) | 300,000 | |
| Investments | 260,000 | |
| Buildings & equipment (net) | 680,000 | |
| Total assets | $ | 1,839,000 |
| Liabilities | ||
| Accounts payable and accrued liabilities | $ | 160,000 |
| Notes payable | 710,000 | |
| Total liabilities | $ | 870,000 |
| Net Assets | ||
| Unrestricted | $ | 510,000 |
| Temporarily restricted | 199,000 | |
| Permanently restricted | 260,000 | |
| Total net assets | $ | 969,000 |
| Total liabilities and net assets | $ | 1,839,000 |
The buildings and equipment reported by Help & Save have a fair value of $990,000. The buildings and equipment reported by Swim For Safety have a fair value of $829,000.
Assume Help & Save pays $1.16 million in cash from its unrestricted net assets to gain complete control over Swim For Safety. It is not assumed that Swim For Safety will be predominantly supported by contributions and investment income in the future. What balances will appear on the combined balance sheet immediately after control is gained?
Assume Help & Save pays $1,150,000 in cash from its unrestricted net assets to gain complete control over Swim For Safety. It is assumed that Swim For Safety will be predominantly supported by contributions and investment income in the future. What balances will appear on the combined balance sheet immediately after control is gained?
Assume that these two organizations are combined into a new private not-for-profit entity to be known as Help–Swim–Save. A new governing body will be formed to manage and operate this new organization. What balances will appear on the combined balance sheet immediately after control is gained?
Step by Step Solution
3.48 Rating (168 Votes )
There are 3 Steps involved in it
Part A Balances To Be Reported Cash 1129000 16900005990001160000 Contributions receivable net 460000 ... View full answer
Get step-by-step solutions from verified subject matter experts
Study Help