Reference no: EM133004225
Question - All facts about this NFPO are identical to those described in Problem 5, except for the following:
The Society will use the restricted fund method of accounting for contributions.
The Society will use three separate funds for reporting purposes-operating fund, collections and long-term capital assets fund, and scholarship fund. Long-term capital assets include depreciable assets with a useful life in excess of 5 years, for example, leasehold improvements.
The cash balance of $5,000 consisted of $1,000 in the scholarship fund and $4,000 in the operating fund.
The interest income is retained in the scholarship fund until it is paid out for scholarships.
The operating fund loaned $5,850 to the long-term capital asset fund for the shortfall between the cost of lease- hold improvements and the corporate donations for leasehold improvements.
Required -
a) Show the journal entries related to the Notes and additional information. Assume $3,000 of Interest is transferred to the operating fund from the endowment fund. Also assume the scholarship is paid from the operating fund.
b) Prepare a Statement of financial position for December 31, Year 5.