Urban Hospice (UH) is a not for profits' organization. It receives some funding from the government but most of its funding comes from donations and brquests. It uses the deferral method to account for contributions and s/n encumbrance system to control expenditures. For simplicity, UH accounts for all of irs activities through an operational fund.

UH had provided the following transactions for the current year.

a) At the beginning of the test, UH unexpectedly received $750,000 from the government to purchase three monitoring machines. At the end if the year, UH took depreciation of $150,000 on the machines.

b) UH's anbyal Christmas fundraising galla generated $2,800,000 in cash and $625,000 in pledges. Based in previous year experiment, UH estimates that 80% off the pledges will be collected in the first 3 months of the following year.

c) The government had granted UH's application for $900,000 in operating funds. By UH's year end, ask fund had been received except for $75,000 which was' received a month after the year end.

d) Invoices totaling $2,175,000 were received for goods and services. UH paid 95% of these invoices by year end. Purchases for $1,895,000 had been issued for these goods and services.

e) The family of a late UH patient donated $250,000 to UH ok the condition that it will be invested in bonds or dividend producing marketable securities. There is an additional stipulation that only the investment income can be used for operating expenditures.

Prepare the necessary journal entries for the transactions above.

Answer rating: 100% (QA)

a Dr Government Funding 750000 Cr Cash 750000 b Dr Pledges Receivab... View the full answer