Wings is a not-for-profit organization dedicated to the promotion of flying in youths. It owns a number of airplanes at various airports which it uses to provide introductory flights in order to encourage young adults to pursue flight training lessons and possible careers as commercial airline pilots. At the end of last year, Wings reported the following trial balance:

	DR	CR
Cash	$180,000
Investments	2,400,000
Contributions receivable	520,000
Property, plant and equipment, net	1,200,000
Payables		$400,000
Long-term liabilities		800,000
Net assets—without donor restrictions		1,600,000
Net assets—with donor restrictions		1,500,000
	$4,300,000	$4,300,000

At year-end, the investments are allocated as follows:

Investment—Without Donor Restrictions	40%
Investment—With Donor Restrictions	60%

These investments earn a 5% cash return during the following year.

During the following year, Wings received $2,800,000 of unrestricted donations and $325,000 of donations whose use is restricted by donors as to use. All contributions are on account when made.

Program and support expenses for the current year are $2,600,000 and $370,000, respectively, both on account. Of the program expenses, $200,000 are funded from restricted funds as they are used for approved expenditures. During the year, Wings purchased an airplane for a cash purchase price of $290,000 and recorded depreciation expense on existing depreciable assets of $90,000 (90% of which is allocated to program expenses and 10% of which is allocated to support expenses). The organization purchased additional investments with excess cash in the amount of $120,000 and also repaid $115,000 principal amount of long-term debt. Finally, during the year, the organization collected $3,000,000 of contributions receivable and paid $2,900,000 of accounts payable.

a. Prepare journal entries for the organization’s financial activities during the year.

b. Prepare the year-end statement of activities and statement of financial position.

 Use a negative sign with your answer to indicate a decrease in net assets or release of net assets from restriction.

Statement of Activities
	Without Donor Restrictions	With Donor Restrictions	Total
Support—contributions	Answer	Answer	Answer
Revenues—investment	Answer	Answer	Answer
Net assets released from restrictions	Answer	Answer	Answer
Total support and revenue	Answer	Answer	Answer
Expenses—program	Answer	Answer	Answer
Expenses—support	Answer	Answer	Answer
Total expenses	Answer	Answer	Answer
Change in net assets	Answer	Answer	Answer
Net assets beginning of year	Answer	Answer	Answer
Net assets end of year	Answer	Answer	Answer

Statement of Financial Position
Investments	Answer
Contributions receivable	Answer
Total current assets	Answer
Property plant and equipment, net	Answer
Total assets	Answer
Cash overdraft	Answer
Payables	Answer
Total current liabilities	Answer
Long-term liabilities	Answer
Total liabilities	Answer
Net assets—without donor restrictions	Answer
Net assets—with donor restrictions	Answer
Total net assets	Answer
Total liabilities and net assets	Answer