Reference no: EM131704315

Question: (Journal entries for an NFPO) Good Health, an NFPO, conducts two types of programs: education and research. It does not use fund accounting. During 2013, the following transactions and events took place. Prepare journal
entries for these transactions, identifying increases and decreases by net asset classification as appropriate.

1. Pledges amounting to $100,000 were received, to be used for any purpose designated by the trustees. Good Health normally collects 80 percent of the amount pledged.

2. Good Health collected $75,000 in cash on the amount pledged in the previous transaction. It wrote off the balance as uncollectible.

3. Ed Victor donated $5,000, stipulating that it could be used for any purpose, but only during 2014.

4. Howard Gore donated $875,000, stipulating that the donation must be used solely to purchase a building that Good Health could use for research.

5. Good Health invested $20,000 of unrestricted resources in equity securities. Earnings on these resources amounted to $1,000 in 2013.

6. Late in the year, Good Health used Howard Gore's donation (see transaction 4) and unrestricted resources of $140,000 to purchase a building for research purposes.

7. The following services were donated to Good Health:

a. Audit of the financial statements by an accounting firm-$5,000

b. Professional services by an advertising agency in connection with a fund-raising campaign-$3,000

c. Ushering services at educational meetings, provided by high school students. If paid for, these services would cost $1,000.

8. At year-end, the investments referred to in transaction 5 had a fair value of $22,000.

9. Good Health conducted a fund-raising campaign; the donations were to be used solely for research into the causes of a particular disease. Donations totaled $45,000 in cash.

10. Good Health paid $35,000 for expenses on the research project in the previous transaction.