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The Horizon Healthcare Foundation was formed to solicit donations that support c

ID: 109394 • Letter: T

Question

The Horizon Healthcare Foundation was formed to solicit donations that support certain initiatives of the Horizon Hospital. The Foundation is a separate legal entity that meets all the relevant IRS criteria for foundations. David, the hospital controller, has prepared an operating budget for the coming year that includes all revenues and expenses of the foundation within the hospital's budget. Peggy, the hospital CFO, tells David to remove the Foundation expenses and revenues. What is correct operating budget procedure in this case?

Leave the foundation revenues and expenses in the hospital's operating budget.

Remove the foundation revenues and expenses because it is a separate legal entity.

Remove the foundation revenues and expenses because Peggy doesn't get along with the foundation's director.

None of these is correct.

A.

Leave the foundation revenues and expenses in the hospital's operating budget.

B.

Remove the foundation revenues and expenses because it is a separate legal entity.

C.

Remove the foundation revenues and expenses because Peggy doesn't get along with the foundation's director.

D.

None of these is correct.

Explanation / Answer

ANSWER:

GIVEN,

David, the hospital controller, has prepared an operating budget for the coming year that includes all revenues and expenses of the foundation within the hospital's budget.

Peggy, the hospital CFO, tells David to remove the Foundation expenses and revenues.

B.Remove the foundation revenues and expenses because it is a separate legal entity.

Private Foundations. Every organization that qualifies for tax exemption as an organization described in section 501(c)(3) is a private foundation unless it falls into one of the categories specifically excluded from the definition of that term.

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