A VHWO had the following transactions affecting its operations for the year Requ
ID: 2465725 • Letter: A
Question
A VHWO had the following transactions affecting its operations for the year
Required:(1)For each of the above transactions, indicate which net asset classifications would be affected by the transaction.
(2)For each of the abocve transactions, prepare the general journal entry, in proper form, to record the transaction. Omit explanations. Use the letter of entry as the date.
(1) The organization received unretricted pledges for $520,000. Of this amount, $500,000 is expected to be collected. (2) An individual gave the organization securities with a fair market value of $1 million. The gift provided that the principal must remain intact while the income may be spent for any purpose the board of trystees approves. (3) Unrestricted contributions that were designated by donors for use in the following year were received in cash. These contributions totaled $73,000. (4) Salaries of employees involved in performing services for the organization amounted to $85,000 and were paid in cash during the yearExplanation / Answer
The organization received unretricted pledges for $520,000. Of this amount, $500,000 is expected to be collected.
Debit Cash $520000
Credit Allowance for Uncollectible pledge $20000
Credit Unrestricted Support - contributions $500000
An individual gave the organization securities with a fair market value of $1 million. The gift provided that the principal must remain intact while the income may be spent for any purpose the board of trystees approves.
Debit Cash $1,000,000
Credit Temporarily restricted net assets-
reclassifications in $1,000,000
Unrestricted contributions that were designated by donors for use in the following year were received in cash. These contributions totaled $73,000.
Debit Cash $73000
Credit Unrestricted revenue - contributions $73000
Salaries of employees involved in performing services for the organization amounted to $85,000 and were paid in cash during the year
Debit Expenses - Salaries to employees $85,000
Credit Cash $85000
Transactions and Journal Entries with net assets classifications: (1)The organization received unretricted pledges for $520,000. Of this amount, $500,000 is expected to be collected.
Debit Cash $520000
Credit Allowance for Uncollectible pledge $20000
Credit Unrestricted Support - contributions $500000
(2)An individual gave the organization securities with a fair market value of $1 million. The gift provided that the principal must remain intact while the income may be spent for any purpose the board of trystees approves.
Debit Cash $1,000,000
Credit Temporarily restricted net assets-
reclassifications in $1,000,000
(3)Unrestricted contributions that were designated by donors for use in the following year were received in cash. These contributions totaled $73,000.
Debit Cash $73000
Credit Unrestricted revenue - contributions $73000
(4)Salaries of employees involved in performing services for the organization amounted to $85,000 and were paid in cash during the year
Debit Expenses - Salaries to employees $85,000
Credit Cash $85000
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