Analyze the following scenario: The Unified Path is an umbrella organization tha

Question

Analyze the following scenario: The Unified Path is an umbrella organization that solicits donations to support its many charitable suborganizations. One of these is the Millbridge Family Service (MFS). All transactions for MFS are handled through the MFS special purpose fund. For both the United Path general operating fund and MFS special purpose fund, show the impact of the fundamental equation of accounting of each of the following events.

* Unified Path transfers cash to the MFS bank account for $50,000 for the MFS family counseling program. This is a direct subsidy to MFS. No repayment is required.
* Unified Path has a bookkeeping department which assists the suborganizations with their purchase of insurance, supplies, payroll, and other items. This centralized approach is less expensive than if each part of the larger organization had its own bookkeeping staff. Unified
* Path charges MFS $400 for bookkeeping services for the month. No payment is made at this time.
MFS borrows $20,000 from Unified Path’s general fund to meet a current operating shortfall. MFS will repay this loan from money received from charges to its clients within six months.

Explanation / Answer

the Fundamental Accounting Equation: Assets = Liabilities + Equity fundamental accounting equation If You Like This Web Site, You Will Love The Book.Only $9.95 plus shipping Businesses usually own assets. Assets are things that can be used to generate revenue through the sale of goods and services. Assets include cash, inventory, furniture and equipment, and accounts receivable. A business may also own intangible assets such as patents, trademarks and goodwill. Generally Accepted Accounting Principles (GAAP) assumes that all assets of a business are either owned outright by the business owners or are subject to the claims of creditors. Creditors include anyone who has loaned money or extended credit to the business. Loans and other forms of extended credit are called liabilities. The portion of assets not subject to claims by creditors is called equity. In the GAAP framework there must be a continuous equilibrium between assets on the one side and the total of liabilities and equity on the other side. This is represented by the fundamental equation of accounting: Assets = Liabilities + Equity This equation is also the basis for the most basic of accounting reports, the aptly named Balance Sheet. A balance sheet reports what a business owns (assets), what it owes (liabilities) and what remains for the owners (equity) as of a certain date. This equation must always be in balance. Always keep in mind the teeter totter illustration shown above. 1.Unified Path transfers cash to the MFS bank account for $50,000 for the MFS family counseling program. This is a direct subsidy to MFS. No repayment is required.: assets of unified path may be decreased as this is a subsidy and has no repayment 2.Unified Path has a bookkeeping department which assists the suborganizations with their purchase of insurance, supplies, payroll, and other items. This centralized approach is less expensive than if each part of the larger organization had its own bookkeeping staff. Unified Path charges MFS $400 for bookkeeping services for the month. No payment is made at this time.: this will be a debt to mfs which has to b repayed now or some time else . assets of unified path may not have to encurr a decrement if a repayment is done 3......MFS borrows $20,000 from Unified Path’s general fund to meet a current operating shortfall. MFS will repay this loan from money received from charges to its clients within six months.: since the money is in form of aloan there are chances it will b paid with a interst . so unified path will receive more than what is given.its a profit

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