NFP exam 2 - journal entries

Receive a $1,000 contribution and deposit to bank account. The donor placed no restrictions on how we can use this gift.

debit: cash 1,000

credit: contribution rev - NA without restriction 1,000

Received a $15,000 cash gift from a local nursery company for us to write, print, and distribute a booklet on how to design, build, plant, and grow healthy vegetables in a city garden.

debit: cash 15,000

credit: contribution rev- NA with restrictions 15,000

Ex-chair of the board bequeaths $100,000 to increase our endowment fund.

debit: cash 100,000

credit: contribution rev- NA with restriction 100,000

$5,000 was gifted from a donor to be used next year.

debit: cash 5,000

credit: contribution rev- NA with restriction 5,000

Wealthy donor funds $1.2 mil gift to purchase a building to house our senior center.

debit: cash 1.2 mil

credit: contribution rev- NA with restriction 1.2 mil

Strategic planning consulting work worth $20,000 donated by a senior partner in a large multinational consulting firm.

debit: Consulting expense

credit: contribution rev- NA without restriction

A certified electrician contributes $1,000 in services to wiring a new building for charity (enhances nonfinancial asset)

debit: Building

credit: contribution rev - NA without restriction

A nurse contributes $3,000 in services to provide professional services at the free clinic (these services are part of the clinic’s mission)

debit: salary exp

credit: contribution rev - NA without restriction

volunteers contribute their time

debit:

credit: No entry for non-specialized contribution of volunteer’s time

A veterinarian volunteers reading hours at a local high school for a children’s literacy nfp.

debit:

credit: no entry since the Vet is not providing any of her specialized skills

Local auto dealer pledges a $5,000 gift to be funded later this year (after president’s day since car sales are up)

debit: pledge receivable 5,000

credit: contribution rev - NA without restriction 5,000

Local auto dealer funds prior pledge of $5,000

(ex. Local auto dealer pledges a $5,000 gift to be funded later this year (after president’s day since car sales are up)

debit: cash 5,000

credit: pledge receivable 5,000

A charity receives pledges of $1,000 to be paid within the next year. It also receives pledges of $5,000 to be collected 2 and 4 yrs from now. It is estimated the fair value of the long-term pledges is $4,760.

debit: pledge receivable 1,000

credit: contribution rev - NA with restriction 1,000

debit: pledge receivable 5,000

credit: contribution rev - NA with restriction 4,760

credit: discount on pledge receivable 240

An intermediary received $5,000 in cash from a donor. The donor indicated that she wanted her donation to go to the local NFP hospital

Scenario 1: there is no financial relationship between the intermediary and the hospital

debit: cash 5,000

credit: contribution payable 5,000

An intermediary received $5,000 in cash from a donor. The donor indicated that she wanted her donation to go to the local NFP hospital

Scenario 2: the intermediary and hospital are financially interrelated or the intermediary has variance power

debit: cash 5,000

credit: contribution rev - NA without restriction 5,000

Pay senior center rent in cash, this month’s rent is $18,500 on our leased building. Also pay $2,000 utilities bill.

debit: rent expense - management & general 18,500

debit: utilities expense - management & general 2,000

credit: cash 20,500

Record a $4,000 expense for the preparation by accountants and legal review of form 990.

debit: accounting & legal fees - management & general 4,000

credit: cash 4,000

Use payroll service to issue salary and wage checks totaling $10,780 to employees: $1,867 for fundraising staff, $5,990 for program service staff, $2,923 for management & general staff

debit: salary expense - fundraising 1,867

debit: salary expense - program 5,990

debit: salary expense - management & general 2,923

credit: cash 10,780

Pay a physician $500 for ½ day of contacted professional services in the clinic

debit: salary expense - program 500

credit: cash 500

Unrestricted cash donations of $25,000 were received. A local philanthropist also contributed 3,000, which was to be used for the purchase of thanksgiving dinner foodstuffs.

debit: Cash (25,000 + 3,000) 28,000

credit: contribution rev - na without restriction 25,000

credit: contribution rev - na with restriction 3,000

A local grocery store provided fresh produce with a FV of $100. The produce was immediately used.

debit: program expense 100

credit: contribution rev - na without restriction 100

Volunteers from the local university contributed 100 hrs to preparation and serving of meals. The estimated FV of their labor is $750

no entry - not a specialized skill

The Kitchen received a $5,000 federal grant for the purchase of institutional kitchen appliances.

debit: cash 5,000

credit: contribution rev - na with restriction

A local foundation gave the kitchen $6,000 to support serving hot meals next year. The money is to be returned to the foundation if the kitchen does not serve at least 4,000 meals next year.

debit: cash 6,000

credit: refundable advance

At Thanksgiving time, the Kitchen spent $4,100 on foodstuffs for the preparation of the thanksgiving dinner.

debit: program expense 4,1,00

credit: cash 4,100

At Thanksgiving time, the Kitchen spent $4,100 on foodstuffs for the preparation of the thanksgiving dinner.

Reclassification entry

debit: reclassification from NA with restriction 3,000

credit: reclassification to NA without restriction 3,000 (prob 1)

Closing Step 1: Close Restricted Revenue (Ex 14-23 $8,000 total)

debit: Contribution Revenue - NA with restriction $8,000

| Credit: Net Assets with restriction $8,000

Closing Step 2: Close Unrestricted Revenue (Ex 14-23 $25,100 total)

Debit: Contribution Revenue - NA without restriction $25,100

| Credit: Net Assets without restriction $25,100

Closing Step 3: Close Expenses (Ex 14-23 $4,200 total)

Debit: Net Assets without restriction $4,200

| Credit: Program Expense $4,200

Closing Step 4: Close the restricted side of the Reclassification (Ex 14-23 $3,000 total)

Debit: Net Assets with restriction $3,000

| Credit: Reclass from NA with restriction $3,000

Closing Step 5: Close the unrestricted side of the Reclassification (Ex 14-23 $3,000 total)

Debit: Reclass to NA without restriction $3,000

| Credit: Net Assets without restriction $3,000