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Subject Topic: Need help on a Not-For-Profit Question (Topic Closed Topic Closed) Post ReplyPost New Topic
  
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greentea
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Joined: 03 Feb 2010
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Posted: 12 May 2010 at 02:38 | IP Logged  

Question:

At the beginning of the year, the Baker Fund, a non-
governmental not-for-profit corporation, received a
$125,000 contribution restricted to youth activity
programs. During the year, youth activities generated
revenues of $89,000 and had program expenses of $95,000.
What amount should Baker report as net assets released
from restrictions for the current year?

a. $0
b. $6,000
c. $95,000
d. 125,000

The ansewr is "C". My questions is why we don't have to
release the $89,000 revenues from restriction ?

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gottobecpa
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Posted: 12 May 2010 at 08:24 | IP Logged  

You unrestrict the fund you spend not what you earn

__________________
16-April-10-FARE-77!
29-May-10-AUD-81!
7-Aug-10-REG-76!
31-Aug-10-BEC-87 (unbelievable because studied the least for this, 15 days)
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CharliePetApple
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Posted: 12 May 2010 at 08:32 | IP Logged  

cause 89,000 is a regular non-restricted revenue, so no need to release from restriction.

125,000 is the one restricted to spending on youth programs, 95,000 of that amount was spent according to the requirement and can be released. Now the remaining restricted 30,000 fund still has to be spent on youth activities or returned. And 89,000 can be used in any other activity at any time

I believe the rule is: if an activity has both restricted and unrestricted revenue then you spend and release restricted portion of it first



__________________
BEC - PASS 11/17/09 Wiley 2008
AUD - PASS 02/25/10 Wiley 2008
REG - PASS 03/23/10 Wiley 2010
FAR - PASS 06/22/10 Wiley 2010
There is no failure except in no longer trying
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