Reference no: EM133168502

Question - The Stayner Art Gallery is a NFPO funded by government grants and private donations. It uses the Restricted Fund Method of Accounting and has 3 funds, an operating fund, a capital fund and an endowment fund.

The Gallery records donated material and services if such items would have been otherwise purchased.

The following are some selected activities that took place during the current year.

i. A wealthy donor gave the Gallery $300,000 in cash on the condition that the principal amount be invested in marketable securities and that the interest earned from this investment be used to protect the paintings in the Gallery.

ii. The $300,000 was invested in Government bonds paying 3% annually.

iii. Interest received from this investment at the end of the year was $9,000.

iv. Pledges totaling $200,000 were made to the Gallery, of which $50,000 applies to the operation of the following year. It is estimated that 1% of all pledges will be uncollectible.

v. Pledges of $175,000 were collected and $1,000 were written off.

vi. A government grant of $400,000 for acquisition and renovation of an office building for the Gallery was approved by the government. All the grant money was received except for the last 10% which is expected to be collected in January of the following year.

vii. A purchase order for goods and services totaling $100,000 was issued in April of the current year. In June the goods were received. By the end of the year the invoice was paid except of 5% which remained outstanding at the year end.

viii. An old office building was acquired and renovated at a cost of $350,000. Amortization on the office building was $15,000.

ix. A local radio station donated advertising time to the Society. The gallery saved $4,000.

x. The endowment fund bought a photocopier for $1,000 with funds borrowed from the operating fund.

Required - Prepare the journal entries required to record these transactions indicating which fund each journal entry will be recorded in.