Reference no: EM13788207
Senior Immigrants (SI) is an NFPO established a few years ago to help senior immigrants learn English and integrate into Canadian society. SI has some paid staff supported by a large group of volunteers. The organization is funded by government grants and private donations. During the current year, the following events occurred:
SI was awarded a $1,000,000 government grant. The terms of the grant are:
$380,000 for the acquisition of four mini-buses
$120,000 for rent for the next 2 years
$500,000 for SIs operations and programs
In the current year, SI received $750,000’$380,000 for the mini-buses, $120,000 for the rent, and $250,000 for its operations and programs. The remaining $250,000 will be released next year.
During the current year, SI paid actual rental costs of $55,000.
A local car dealership that has made substantial donations to SI in the past supplied the mini-buses and customized them to SIs requirements. The customized vehicles have a fair value of $500,000, but the car dealership sold the vehicles to SI for $425,000. SI took delivery of the vehicles in the summer of the current year.
The vehicles are expected to have a 10-year useful life. SIs policy is to take a full year’s of amortization in the year of acquisition.
In the current year, SI paid salaries of $150,000. $25,000 of the salaries related to fundraising for endowments and the rest was related to operations and SIs annual fundraising projects.
In the current year, SI paid $10,000 for a training seminar for volunteers.
In the spring of the current year, SI held a karaoke fundraiser that raised $50,000. SI incurred $21,000 in costs related to this fundraiser. The funds raised have been designated by the donor for SIs Canadian cooking program.
SIs participation in an annual local television telethon resulted in pledges of $235,000. $169,000 had been collected by the end of the current year.
On July 1 of the current year, SI received an endowment of $250,000 from a refugee who became a successful business person in Canada. The investment income from this endowment can be used by SI as it sees fit. The funds were invested in bonds that have an annual yield of 3%.
Required:
Prepare the necessary journal entries for the current year using the deferral method and the restricted fund method. Be sure the account names you use clearly identify the type of account or fund.
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: Senior Immigrants (SI) is an NFPO established a few years ago to help senior immigrants learn English and integrate into Canadian society. SI has some paid staff supported by a large group of volunteers. Prepare the necessary journal entries for the ..
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