The Far North Centre (the Centre) is an anti-poverty organization funded by contributions from governments and the general public. For a number of years it has been run by a small group of permanent employees with the help of part-timers and dedicated volunteers. It owns its premises, which are in the process of being renovated. The funds for this were obtained through a special capital fund campaign carried out last year. Its main program is the daily provision of meals to the needy. It also distributes clothing, most of which is donated. Operating funds come from government grants, interest earned from endowment investments, and a public campaign held in the latter part of each year to raise funds for the needs of the next fiscal year. The Centre maintains its records in accordance with the restricted fund method of accounting for contributions, and prepares its financial statements using an operating fund, a capital fund (for all activities related to capital assets), and an endowment fund.
The following are the fund trial balances as at January 1, Year 6:

The following transactions took place in Year 6.
1. The Year 6 budget, the totals of which are summarized below, was recorded.
Budgeted revenues ....... $2,200,000
Budgeted expenses ....... 2,150,000
Budgeted surplus ....... $ 50,000
2. The agency uses an encumbrance system in the operating fund as a means of controlling expenditures. During the year, purchase orders for goods and services at an estimated amount of $1,450,000 were issued.
3. $35,000 from endowment fund cash was invested in marketable securities.
4. Office equipment costing $2,500 was purchased with operating fund cash.
5. Invoices totaling $1,375,000 were received on purchase orders originally recorded at an estimated cost of $1,392,000. These invoices were recorded as accounts payable and were allocated 55% to food program, 20% to clothing program, and 25% to administration.
6. The capital fund grants receivable were collected in full, and the $9,000 in accounts payable was paid. During Year 6, building renovations costing $300,000 and equipment purchases of $85,000 were made. Of this cost, 90% was paid, with the balance held back and still owing at year-end.
7. Operating fund accounts payable amounting to $1,560,000 and the wages payable and accrued liabilities at the beginning of the year were all paid.
8. All of the operating fund pledges and grants receivable at the beginning of the year were collected in full.
9. The deferred revenue from the Year 5 fundraising campaign was made up of the following:
Contributions ....... $1,200,000
Less: Campaign expense .. 400,000
$ 800,000
The Centre runs the campaign with its owns people and is fully responsible for all decisions made during the campaign.
10. Government grants for operating purposes totaled $900,000, of which $850,000 was received during the year, with the balance expected early in Year 7.
11. The total wage costs for the year amounted to $400,000, of which $325,000 was paid and $75,000 is payable at year-end. These costs are to be allocated 40% each to the food and clothing programs, with the balance to administration.
12. The campaign to raise funds for next year's operations was held in December. Cash of $500,000 was collected and pledges of $700,000 were received. It is expected that 5% of these pledges will be uncollectible. Total fundraising costs were $322,000, of which $75,000 is still owed to suppliers.
13. An endowment contribution of $8,000 cash was received. In addition, the investments in the endowment fund earned $31,200 in interest.
14. The annual depreciation on the buildings and equipment amounted to $92,000.
15. At the end of the year, the balances in the encumbrance accounts and the budget accounts were closed.
Required:
(a) Prepare the journal entries necessary to reflect the Year 6 events.
(b) For each fund, prepare a Year 6 statement of financial position and statement of operations and changes in fund balance.
(c) Prepare a cash flow statement on a non-fund basis.
(d) Prepare closing entries.
(e) What percentage of Year 6 revenues of the operating fund were spent on program costs and what percentage was spent on administration and fundraising? How will users of these financial statements feel about these percentages?

Debit Credit Operating Fund Cash Pledges receivable Allowance for uncollectible pledges Grants receivable Accounts payable Wages payable Accrued liabilities Deferred revenue Fund balance $570,500 705,000 $ 30,000 217,500 427,500 137,250 9,750 800,000 88,500 $1,493,000 $1,493,000 Capital Fund Cash Grants receivable Land and building Furniture and equipment Accumulated amortization Accounts payable Investment in capital assets Fund balance 287,500 112,500 810,250 491,000 648,200 9,000 653,050 391,000 $1,701,250 $1,701,250 Endowment Fund Cash Investments Fund balance $37,500 375,000 $412,500 $412,500 $412,500