U D E G H J K L M N O P Q R S T V W X AB 52 Statement of Activity and Changes in Net Assets 53 Dance Company 54 As of June 30 55 Unrestricted Funds Restricted Funds 56 Operating Endowment Current Last Year Revenue Fund Fund Building Year TOTAL TOTAL 57 Ticket Sales $ 58,256 58 Other Income - Dinner 59 Donations 8,559 60 Grants 2,500 61 $ $ $ $ $ 69,315 62 63 Expenses 64 Staff Salaries A $ 21,256 65 Productions 12,569 66 Marketing 5,675 67 Office Operations 3,512 68 Utilities 1,789 69 Travel 6,258 70 Guest Artists 27,156 71 Mortgage 6.500 72 Misc 895 73 $ $ 85,610 74 75 Changes in Net Assets 76 $ - $ $ $ $ (16,295) 77 78 Net Assets - Beginning of Year 79 6,250 80 81 Board Designated Fund Transfers 82 83 84 Net Assets - End of Year 85 $ $ - $ - $ $ (10,045) Sheet1 Sheet2 Sheet3 +assets, and $225,000 in total expenses at the end of a fiscal year. CREATING A FINANCIAL REPORT To better understand how a financial report is developed please read the fol- lowing description and respond to the five questions immediately following. Dance company financial report The Wing and a Prayer Dance Company just finished its third season of operation. The company performs four weekends, distributed across one weekend each in October, December, February, and April. They perform from Thursday to Saturday in a 1,000-seat theater. The single ticket prices are $10 and $16, and the series subscription prices to the four weekends are $32 and $52. During this last season, 60 percent of the subscriptions were sold at $52. The single ticket revenue was distributed through sales of 55 percent for the $16 tickets and 45 percent for the $10 tickets. Statement of activity and changes in net assets Revenue - This year, the company was able to generate $99,950 in revenue. They sold $30,000 in single tickets and $39,855 in subscriptions. They received a grant from the state arts council for $ 10,000 and donations of $13,545. They raised $6,550 from a benefit dinner. All these funds were designated as "unrestricted" by the board. Expenses - The expenses for the year totaled $96,450. The total was distributed in the following manner: $25,500 for salaries and benefits, $30,000 for guest artist fees, $2,400 for the office, $6,450 for travel, $7,800 for marketing, $15,000 for productions, $1,800 for utilities, $6,500 in mortgage payments, and $1,000 for miscellaneous expenses. Net Assets - They had net assets of $11,500 in their operating fund at the beginning of the year, and $1,500 in a restricted endowment fund.Balance sheet Assets According to the bookkeeper for the company, the year ended with $79,400 in total liabilities and net assets. The unrestricted assets were made up of the following: $13,800 in cash, $1,200 in accounts receivable, $2,500 in prepaid expenses (deposits they made), a $13,000 inventory of scenery and costumes. Their temporarily restricted assets included $1,500 in an endowment fund, and $47,400 in an account for land and a building. liabilities The unrestricted liabilities were listed as $500 in accounts payable, $15,000 in a loan due to the bank, and the $23,000 in m CHAPTER 10: Economics and Financial Management temporarily restricted liabilities from the balance due on the mortgage. The total liability was $38,500. AB C D E F Dance Company Balance Sheet Balance Sheet as ofJune 30 ASSETS = LIABILITIES + NET ASSETS Net Assets = Assets - Liabilities Temporally Unrestricted Funds Restricted Funds operating Endowment Current Last Year Assets Fund Fund Building Year TOTAL TOTAL Cash $ - S S - - $ - $ 15,826 Accounts receivable - - - - 891 Property and Land - - - - 47,400 less depreciation - - - - - Prepaid Expenses (depo) - - - - 2,500 - less depreciation - - - - - Scenery & Costume inventory - - - - 10,000 TOTAL ASSETS s - S S - - s - $ 76,617 Liabilities Accounts payable $ . $ $ - - $ - $ 250 Mortgage - - - 29,500 Bank notes payable - - - - - TOTAL LIABILITIES $ - 3 3 - - 3 - $ 29,750 Net Assets Unrestricted Net Assets - - S - 17,367 Temporally restricted net assets - - - S - 29,500 TOTAL NET ASSETS - - - - 46,867 Total Liabilities 8x Net Assets 3 - S S - - $ - $ 76 S17 Sheet'] SheetZ Sheet3 + Questions 1. Prepare an annual nancial report for the dance company. showing the information above in the standard form of a Balance Sheet and a Statement of Activity (Figures 106 and 10.7). . Based on the balance sheet you created. what is the change in the dance company's net assets? Did net assets increase or decrease this year? . Assuming that cash. accounts receivable. and prepaid expenses are totaled to make expendable assets, what is the ratio of assets to total liabilities? What does this gure tell you about the company's nancial condition? (See Figure 10.8 for ratios.) . Based on a venue with total of 12,000 seats to sell (a momma theater times four weekends times three performances per weekend), what was the average number of tickets sold per performance by the dance company? (Note: To answer this question you will need to work trom the prices given above and the total sales from subscription and single tickets. The calculations assume a subscriber order includes all four shows.) . What is the percentage of total income earned through sales versus the total amount from donations, grants. and other sources