Reference no: EM132553858
The Clean Green Co. is a not-for-profit organization funded by government grants and private donations. It prepares its annual financial statements using the restricted fund method of accounting for contributions. Required: The following summarizes some of the transactions that were made in Year 1.
Question 1: In accordance with the requirements of the Handbook, prepare the journal entries necessary to reflect the transactions. Indicate in which fund each journal entry will be recorded.
Show all calculations for full marks.
a. January 1, a member of Clean Green Co. donated marketable securities valued at $240,000 with the condition that the principal amount cannot be spent and the income earned from the investment be spent on operations. A return of 8% was earned in the current year.
b. During the year, a public campaign was held to raise funds for daily operations for the current year. Cash of $750,000 was collected, and pledges for an additional $60,000 were received by the end of the year. It is estimated that approximately 95% of these pledges will be collected early in the new year.
c. The provincial government pledged $400,000 for the year to cover operating costs and an additional $200,000 to purchase machinery. All of the grant money was received by the end of the year, except for the last $20,000 to cover operating costs for December.
d. On June 1, BBB used the $200,000 received from the provincial government to purchase machinery for the care facility.