Urban Hospice (UH) is a not-for-profit organization. It receives some funding from the government, but most...

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Urban Hospice (UH) is a not-for-profit organization. It receives some funding from the government, but most of its funding comes from donations and bequests. It uses the deferral method to account for contributions and an encumbrance system to control expenditures. For simplicity, UH accounts for all of its activities through an operations fund. 20 mark UH has provided the following selected transactions for the current year: a. At the beginning of the year, UH unexpectedly received $900,000 from the government to purchase three monitoring machines. UH immediately purchased the machines. Since UH purchased the machines as soon as the funds were received, it did not prepare a purchase order for them. At the end of the year, UH took depreciation of $180,000 on the machines. b. UH's annual Christmas fundraising gala generated $2,945,000 in cash and $1. 550,000 in pledges. Based on previous years experiences, UH estimates that 90 percent of the pledges will be collected in the first three months of the following year. c. The government had granted UH's application for $960,000 in operating funds. By UH's year-end, all funds had been received except for $80,000 which was received a month after the year-end. d. Invoices totalling $2,000,000 were received for goods and services. UH had paid 87 percent of the invoiced amount by year-end. Purchase orders for $1,680,000 had been issued or these goods and services. e. The family of a late UH patient donated $200,000 to UH on the condition that it 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. Required: Prepare the necessary journal entries for the above transactions. Urban Hospice (UH) is a not-for-profit organization. It receives some funding from the government, but most of its funding comes from donations and bequests. It uses the deferral method to account for contributions and an encumbrance system to control expenditures. For simplicity, UH accounts for all of its activities through an operations fund. 20 mark UH has provided the following selected transactions for the current year: a. At the beginning of the year, UH unexpectedly received $900,000 from the government to purchase three monitoring machines. UH immediately purchased the machines. Since UH purchased the machines as soon as the funds were received, it did not prepare a purchase order for them. At the end of the year, UH took depreciation of $180,000 on the machines. b. UH's annual Christmas fundraising gala generated $2,945,000 in cash and $1. 550,000 in pledges. Based on previous years experiences, UH estimates that 90 percent of the pledges will be collected in the first three months of the following year. c. The government had granted UH's application for $960,000 in operating funds. By UH's year-end, all funds had been received except for $80,000 which was received a month after the year-end. d. Invoices totalling $2,000,000 were received for goods and services. UH had paid 87 percent of the invoiced amount by year-end. Purchase orders for $1,680,000 had been issued or these goods and services. e. The family of a late UH patient donated $200,000 to UH on the condition that it 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. Required: Prepare the necessary journal entries for the above transactions.

Answer rating: 100% (QA)

Question Step 1 Answer Entries for transaction given from a to e are prepared the j... View the full answer