Joined: 03 Mar 2009
Online Status: Offline Posts: 360
Posted: 23 Aug 2009 at 09:05 | IP Logged
Mangorange wrote:
Hi optimist, do you mean that if
the donor designates the cash to be used to finance
operations, the cash is still restricted? And this cash
is considered current because it's restricted for
operations but nothing else? If that's the case, why is
Becker's explanation saying the $2,000 interest is
unrestricted?
I'm still confused...
I would say that 2000 is current as it will be expensed
next year. But is restricted because donor has
restriction on it.
On Dec. 1995, this will be restricted Current asset.
Joined: 17 Jun 2016 Location: United States
Online Status: Offline Posts: 1
Posted: 17 Jun 2016 at 21:04 | IP Logged
FYI - on question 1, Becker asks a similar question as
follows:
In Year 1, Citizens' Health, a voluntary health and
welfare organization, received a bequest of a $200,000
certificate of deposit maturing in Year 2. The
testator's only stipulations were that this
certificate be held until maturity and that the
interest revenue be used to finance salaries for an
ongoing preschool program. Interest revenue for Year 2
was $16,000. When the certificate matured and was
redeemed, the board of trustees adopted a formal
resolution designating $40,000 of the proceeds for the
future purchase of equipment for the preschool
program. What amount should Citizen report in its Year
2 year-end balance sheet as unrestricted net assets
designated for the preschool program?
a. &nbs p;$16,000
b. &nbs p;$40,000
c. &nbs p;$0
d. &nbs p;$56,000
The correct answer is B. Do no assume that the
salaries have been spent, The explanation is as
follows:
Choice "b" is correct. The $40,000 for equipment is
the only designation provided in the fact pattern.
Other data represent distractors. In Year 2 when the
$200,000 certificate of deposit matures, it is
transferred from the internal term endowment fund
(temporarily restricted assets) to the internal
current unrestricted fund (unrestricted net assets).
Of the $200,000 proceeds, $40,000 is board-designated
for the preschool program, the remaining $160,000 is
undesignated. The $16,000 interest revenue for Year 2
is donor-restricted to finance salaries for a
preschool program; therefore, it is recorded in the
internal current restricted fund (temporarily
restricted net assets) as revenue. The Year 2 year-end
balance sheet should report net assets designated for
the preschool program of $40,000.
You cannot post new topics in this forum You cannot reply to topics in this forum You cannot delete your posts in this forum You cannot edit your posts in this forum You cannot create polls in this forum You cannot vote in polls in this forum
Active Topics 
Memberlist 
Search 
Help
Register 
Login
Topic: some not-for-profit questions
Topic Closed)
