Reference no: EM131704281

Question: (Identifying the appropriate net asset classification) For each of the following transactions, identify the net asset classification (unrestricted, temporarily restricted, permanently restricted) that is affected in the NFPO's financial statements for the year ended December 31, 2013. More than one net asset class may be affected in some transactions.

1. Donor A gave the NFPO a cash gift of $50,000 in June 2012, telling the NFPO the gift could not be used until 2013. Identify the net asset classification(s) in the journal entry made at the start of 2013.

2. Attorney Howard Gorman volunteered his services to Taconic Singers, an NFPO. He spent 12 hours preparing contracts for the services of professional singers and 8 hours serving as an usher before performances. Gorman normally gets $200 an hour for legal services, and Taconic normally pays $8 an hour when it hires ushers.

3. Donor B sent a letter to an NFPO, saying she would donate $20,000 in cash to the NFPO, to be used for any purpose the NFPO's trustees desired, provided the NFPO raised an equal amount of cash from other donors.

4. Regarding the previous transaction, the NFPO raised $23,000 in cash from other donors and then notified Donor B of its success in meeting her condition for the gift.

5. Donor C donates to a local museum a work of art having a fair value of $5,000, with the understanding that the museum will sell it at auction and use the funds for its general activities.

6. Donor D advises a university that he has established an irrevocable charitable remainder trust, administered by his attorney, whereby his wife will receive income from the trust as long as she lives. At her death, the remaining trust assets will be distributed to the university as a permanent endowment. The university's actuary estimates the fair value of the university's beneficial interest to be $400,000.

7. By December 31, 2013, the fair value of investments held in perpetuity by an NFPO increased by $30,000.