Reference no: EM132251479
Question - Inner City Compassion, Inc. (ICC) solicits donations to provide shelter and counseling to abused children and adults. It also sponsors research into the causes of abuse. ICC accounts for all transactions in a single fund, recording them so as to distinguish between net assets with donor restrictions and net assets without donor restrictions as required for financial reporting purposes.
Prepare journal entries to record the following transactions. Please note that due to formatting, #3 does not exist
1. ICC receives cash contributions of $150,000 and pledges of $100,000, to be used for any purpose approved by the trustees. Based on past experience, the trustees expect to collect 90% of the pledges.
2. ICC receives the following donations in cash, each for certain specific purposes:
3. $25,000, which must be used only for sheltering abused wives;
$100,000, the principal of which (and all investment gains or losses) must be held in perpetuity; and the income must be used only for research purposes; and
$50,000, which must be used (together with any income its investment generates) for acquisition of buildings and equipment.
4. ICC invests the $100,000 contribution from transaction b(2) in equity securities.
5. ICC collects $87,000 in cash from the pledges made in transaction a. and writes off the remaining $13,000 of pledges as uncollectible.
6. ICC spends $30,000 in cash on the youth counseling program.
7. ICC spends $20,000 of the donation received in b(1) for sheltering abused wives.
8. At year-end, the $100,000 investment in transaction c. has a fair value of $104,000.
9. E. Falk, a professional psychiatrist, donates 20 days of her time in counseling youth under an ICC program. Had she not donated time, ICC would have spent $800 a day for these services.
10. K. Schermann sends ICC a letter, stating that he will make a cash donation next year of $25,000, provided ICC raises at least $50,000 in next-year's fundraising campaign.
11. B. Shaw sends ICC $5,000, stipulating that it must be used for next year's programs.
12. Dividends of $2,000 are received on the investments in transaction c.