Reference no: EM132798229

Question - Make a Wish Foundation began the year with the following balances in their accounts:

Cash $20,000

Accounts Receivable, Net 36,000

Pledges Receivable 300,000

Inventory 20,000

Property, Plant, and Equipment, Net 450,000

Accounts Payable 35,000

Notes Payable 220,000

Wages Payable 34,000

Net Assets with Donor Restrictions 177,000

Net Assets without Donor Restrictions 360,000

The foundation had the following financial events during the current year:

1. January 10. Received a $250,000 payment from a pledge made last year.

2. February 16. Placed an order for new furniture for $20,000. They have not yet made the payment, and the furniture has not been delivered yet.

3. March 5. Paid out a $25,000 grant to a small non-profit organization. This was a new grant made in the current fiscal year.

4. May 26. Cut a check for $10,000 towards the deposit for the furniture ordered on February 16th.

5. June 10. Collected $50,000 in new donations.

6. September 30. Assume they began the year with 200 boxes of inventory, each at a cost of $100 (this is already reflected in the starting balance). They purchased an additional 220 boxes at a cost of $140 each. They sold 400 boxes for $150 each.

7. October 7. The furniture ordered on February 16 arrived, and they paid for the balance owed.

8. November 14. Borrowed $80,000 from the local bank on a note payable.

9. December 4. Repaid $30,000 on the note payable and also $3,000 in interest expenses.

10. December 21. Paid its employees $65,000 of wages in cash for the year, $60,000 of which was for the current year, and $5,000 of which was for the outstanding balance owed. Employees earned $80,000 in wages for the year.

11. December 31. Make a Wish had purchased the building it operates from for 1 million dollars (ten years back) for an expected life of 20 years (This is reflected in the starting PPE balance). Account for the depreciation on the organization's building for the year.

Make a Wish uses straight-line depreciation method and assumes a 10% salvage value at the end of the life cycle. They use Last In First Out (LIFO) system of inventory management.

a. Record the transactions in a Transactions Worksheet.

b. Prepare the Balance Sheet of the foundation for the two years.

c. Prepare the Activity Statement of the foundation for the year.

d. Prepare the Cash Flow Statement of the foundation for the year.