Solution manual advanced accounting 2nd by hamlen CH13

Find more at www.downloadslide.com CHAPTER 13 SOLUTIONS TO MULTIPLE CHOICE QUESTIONS, EXERCISES AND PROBLEMS MULTIPLE CHOICE QUESTIONS b c a c d Answers to questions – are based on the following entries and financial statements: Journal entries for 2013: Cash-operations 4,500,000 Contributions—unrestricted 4,500,000 Contributions receivable 431,918 Contributions—temporarily restricted 431,918 Contributions receivable 21,596 Contributions—temporarily restricted Increase in present value of pledge during 2013 = 5% x $431,918 Cash-operations 21,596 200,000 Contributions—temporarily restricted Net assets released— temporarily restricted 200,000 500,000 Net assets released— unrestricted Operating expenses 500,000 Cash—operations Solutions Manual, Chapter 13 500,000 500,000 ©Cambridge Business Publishers, 2013 Find more at www.downloadslide.com Accounts payable Operating expenses 50,000 4,200,000 Cash—operations 4,250,000 Operating expenses 25,000 Contributions—unrestricted 25,000 Operating expenses 850,000 Equipment & furnishings Building Geneva Preschool Statement of activities for 2013 Unrestricted net assets Revenues and other support: Cash contributions $ 4,500,000 Pledges Contributions of services 25,000 Net assets released from restrictions 500,000 _ Total revenues and other support 5,025,000 Expenses (5,575,000) Change in net assets (550,000) Beginning net assets 3,400,000 Ending net assets $ 2,850,000 250,000 600,000 Temporarily restricted net assets $ 200,000 453,514 (500,000) _ 153,514 _ 153,514 1,500,000 $ 1,653,514 Geneva Preschool Balance sheet, December 31, 2013 Assets Liabilities Cash $ 50,000 Accounts payable Contributions receivable 453,514 Equipment & furnishings, net 1,250,000 Net assets Building, net 2,900,000 Net assets—unrestricted Net assets—temporarily restricted Total assets $ 4,653,514 Total liabilities and net assets ©Cambridge Business Publishers, 2013 $ 150,000 2,850,000 1,653,514 $ 4,653,514 Advanced Accounting, 2nd Edition Find more at www.downloadslide.com Geneva Preschool Statement of cash flows for 2013 Cash for operating activities: Contributions Less operating expenses Net cash for operating activities and change in cash Beginning cash balance Ending cash balance Reconciliation of change in net assets to cash for operating activities: Change in net assets Reconciliation items: Increase in pledges Decrease in accounts payable Depreciation expense Cash for operating activities $ 4,700,000 (4,750,000) (50,000) 100,000 $ 50,000 $ (396,486) (453,514) (50,000) 850,000 $ (50,000) a The securities themselves are the permanent endowment, and any changes in fair value are adjustments to permanently restricted net assets c The $10,000,000 contribution is the permanent endowment, so changes in investments using this endowment not affect permanently restricted net assets The donor leaves income unrestricted, so fair value gains and losses affect unrestricted net assets a d 10 b Solutions Manual, Chapter 13 ©Cambridge Business Publishers, 2013 Find more at www.downloadslide.com EXERCISES E13.1 Reporting Donations UR UR (since the services are shown as both an increase and decrease in unrestricted net assets, the answer could be N) N (does not meet criteria for recognizable service) TR (there is documentation for the promise; since it is not to be received until next year, there is an implicit time restriction) UR TR E13.2 Reporting Donations Restricted cash 1,000,000 Refundable contributions The contribution is conditional until plans for the project are more certain 1,000,000 Restricted cash 100,000 Contributions (PR) Investment in securities 100,000 100,000 Restricted cash Cash 100,000 5,000 Investment income (TR) Net assets released (TR) 5,000 5,000 Net assets released (UR) Speaker series expenses 5,000 Cash 5,000 5,000 No entry; not an unconditional promise ©Cambridge Business Publishers, 2013 Advanced Accounting, 2nd Edition Find more at www.downloadslide.com No entry is made at the time of the promise, since it is conditional When the condition is met and the money is received, the following entry is made: Cash 100,000 Contributions (UR) 100,000 Automobile 5,000 Contributions (TR) 5,000 Net assets released (TR) 1,000 Net assets released (UR) 1,000 Depreciation expense (UR) 1,000 Accumulated depreciation 1,000 Cash 5,000,000 Contributions (UR) 5,000,000 The Board restriction is not recognized; only donor restrictions affect the accounting for restrictions on net assets E13.3 Donated Building Journal entries in 2013: January Building 30,000,000 Contributions (TR) December 31 Net assets released (TR) 30,000,000 1,200,000 Net assets released (UR) Depreciation expense (UR) 1,200,000 Accumulated depreciation Solutions Manual, Chapter 13 1,200,000 1,200,000 ©Cambridge Business Publishers, 2013 Find more at www.downloadslide.com Journal entries in 2014: December 31 Net assets released (TR) 1,200,000 Net assets released (UR) Depreciation expense (UR) 1,200,000 1,200,000 Accumulated depreciation E13.4 a 1,200,000 Accounting for Investments Here the donated securities themselves are the permanent endowment Journal entries in 2013: Investment in securities 350,000 Contributions (PR) Cash 350,000 14,000 Investment income (UR) Unrealized losses (PR) 14,000 30,000 Investment in securities 30,000 Account balances, end of 2013: Investment in securities Contributions Investment income Unrealized losses $320,000; asset in statement of financial position $350,000; increase in permanently restricted net assets on statement of activities $14,000; increase in unrestricted net assets on statement of activities $30,000; decrease in permanently restricted net assets on statement of activities Journal entries in 2014: Cash 14,000 Investment income (UR) Investment in securities 40,000 Unrealized gains (PR) ©Cambridge Business Publishers, 2013 14,000 40,000 Advanced Accounting, 2nd Edition Find more at www.downloadslide.com Account balances, end of 2014: Investment in securities Investment income Unrealized gains b $360,000; asset in statement of financial position $14,000; increase in unrestricted net assets on statement of activities $40,000; increase in permanently restricted net assets on statement of activities Here the $350,000 cash is the permanent endowment Changes in journal entries in 2013: The contribution of cash and its investment in securities is recorded as follows: Restricted cash 350,000 Contributions (PR) Investment in securities 350,000 350,000 Restricted cash 350,000 Recognition of the decline in value of the securities is recorded as follows: Unrealized losses (UR) 30,000 Investment in securities 30,000 The unrealized loss is shown as a reduction in unrestricted net assets on the Statement of Activities Changes in journal entries in 2014: Recognition of the increase in value of the securities is recorded as follows: Investment in securities 40,000 Unrealized gains (UR) 40,000 The unrealized gain is shown as an increase in unrestricted net assets on the Statement of Activities All unrealized gains and losses are shown as changes in unrestricted net assets, since they are not donor-restricted Solutions Manual, Chapter 13 ©Cambridge Business Publishers, 2013 Find more at www.downloadslide.com E13.5 Item Reporting Pledged and Restricted Contributions Recognized? Yes No (1) No (2) Yes No (3) Amount Classification $2,700,000 Temporarily restricted 112,500 Temporarily restricted (1) These are not unconditional promises Although there are no stated conditions, the respondents have not yet made a binding commitment to give (2) This pledge is conditioned upon occurrence of a specific uncertain future event (3) These gifts cannot be recognized as revenue until the new program is accredited by AACSB Because we don't know if the program will be accredited, the $250,000 is recorded as a liability which may be refunded E13.6 E13.7 Recognition of Donations $4,000,000; unrestricted net assets increase $100,000; unrestricted net assets increase $7,000; unrestricted net assets increase $800; unrestricted net assets increase unless there is a policy of recording as temporarily restricted $5,000; unrestricted net assets increase $7,000; unrestricted net assets increase and decrease Not recorded $1,000, unrestricted net assets increase Effect of Transactions on Net Assets Unrestricted net assets No effect on net assets No effect on net assets; dr cash, cr conference deposits (liability) No entry Temporarily restricted net assets Unrestricted net assets increase and temporarily restricted net assets decrease by the amount of the depreciation; depreciation expense is then recorded as a decrease in unrestricted net assets No entry Unrestricted net assets (for fair value of texts) ©Cambridge Business Publishers, 2013 Advanced Accounting, 2nd Edition Find more at www.downloadslide.com E13.8 Promises of Future Gifts This documented pledge is recorded on July 1, 2012 at its present value of $1,104,015 (present value of a 10-payment $150,000 ordinary annuity discounted at 6%) 7/1/12 Contributions receivable 1,104,015 Contributions (TR) 1,104,015 6/30/13 Contributions receivable 66,241 Contributions (TR) To record interest on pledge; $66,241 = $1,104,015 x 6% 66,241 7/1/13 Net assets released from time restrictions – TR 150,000 Net assets released from time restrictions – UR 150,000 Cash 150,000 Contributions receivable 150,000 6/30/14 Contributions receivable 61,215 Contributions (TR) To record interest on pledge; $61,215 = ($1,104,015 + $66,241 - $150,000) x 6% E13.9 61,215 Temporary Investments Schedule of Investment Income Dividend revenue on Alpha Corporation stock (300 x $1.50 x 4) Dividend revenue on Beta, Inc stock (1,000 x $.40 x 4) Dividend revenue on Sigma Company stock (200 x $1.60 x 4) Unrealized gains (losses): Loss on Alpha Corporation stock ($19,700 - $21,000) Gain on Beta, Inc stock ($304,000 - $298,000) Loss on Sigma Company stock ($46,800 - $49,000) Total net investment income, gains and losses Solutions Manual, Chapter 13 $ 1,800 1,600 1,280 (1,300) 6,000 (2,200) $ 7,180 ©Cambridge Business Publishers, 2013 Find more at www.downloadslide.com E13.10 College Transactions Increase in cash, increase in contributions (increase in temporarily restricted net assets) This is a life income agreement; increase in cash, increase in contributions (increase in temporarily restricted net assets) Increase in cash, increase in contributions (increase in permanently restricted net assets) Increase in fixed assets, decrease in cash or increase in liabilities, as appropriate Decrease in cash, recognition of expense as a reduction in unrestricted net assets Decrease in cash, increase in loans receivable Increase in cash, increase in liability to the student organizations Decrease in fixed assets, depreciation expense is a reduction in unrestricted net assets; if the fixed assets are temporarily restricted, there will be an additional entry to release the amount of the depreciation from temporarily restricted net assets to unrestricted net assets E13.11 College Journal Entries Assuming the pledges are supported by verifiable documentation, the following entry is recorded: Contributions receivable 800,000 Contribution revenue (UR) Bad debt expense (UR) 800,000 80,000 Allowance for uncollectible pledges 80,000 The above entries assume the pledges will be collected in the current year If not, the uncollected portion adds to temporarily restricted net assets Cash 7,000 Contributions receivable Net assets released from time restrictions – TR 7,000 7,000 Net assets released from time restrictions—UR 7,000 The above entry assumes the pledge was originally recorded as temporarily restricted ©Cambridge Business Publishers, 2013 10 Advanced Accounting, 2nd Edition Find more at www.downloadslide.com Cash 300,000 Investment income— temporarily restricted (6) Marketable securities 300,000 20,000,000 Contributions—permanently restricted Cash 20,000,000 1,600,000 Investment income— temporarily restricted Investment income— unrestricted Net assets released— temporarily restricted 1,200,000 400,000 1,000,000 Net assets released— unrestricted Research program expense 1,000,000 1,000,000 Cash (7) Restricted cash 1,000,000 15,000,000 Contributions revenue— temporarily restricted Net assets released – temporarily restricted 15,000,000 15,000,000 Net assets released— unrestricted Equipment 15,000,000 40,000,000 Restricted cash Loan payable Cash 2,500,000 Equipment (net) Gain on sale—unrestricted Solutions Manual, Chapter 13 15,000,000 25,000,000 2,000,000 500,000 ©Cambridge Business Publishers, 2013 23 Find more at www.downloadslide.com P13.6 Hospital Statement of Activities Montclair Hospital Statement of Activities For the Year Ended December 31, 2014 Unrestricted Revenue, gains and other support: Gross patient service revenue Less: contractual discounts Net patient service revenue Other revenue: Donated supplies Educational program fees Cafeteria/gift shop sales Gift cholesterol testing Unrestricted bequest Income from trust fund Net assets released from restrictions: Satisfaction of program restrictions Total revenue, gains and other support Expenses and losses: Expenses: Professional patient care General services Nursing services Administrative services Bad debt expense Total expenses Losses: Unrealized loss on donated stock Total expenses and losses Change in net assets ©Cambridge Business Publishers, 2013 24 Temporarily Restricted $65,000,000 (5,000,000) 60,000,000 800,000 500,000 1,320,000 $ 1,000,000 1,500,000 100,000 3,800,000 68,020,000 (3,800,000) (2,800,000) 33,000,000 9,500,000 10,000,000 3,500,000 3,000,000 59,000,000 230,000 59,230,000 $ 8,790,000 _ $(2,800,000) Advanced Accounting, 2nd Edition Find more at www.downloadslide.com P13.7 Transactions and Financial Statements Journal entries (not required): Cash 550,000 Contributions revenue— temporarily restricted Contributions revenue— unrestricted 350,000 200,000 Contributions receivable 375,000 Allowance for uncollectibles Contributions revenue— temporarily restricted 112,500 262,500 Marketable securities 200,000 Contributions revenue— permanently restricted 200,000 Cash 12,000 Investment income— unrestricted 12,000 Marketable securities 15,000 Unrealized gains—permanently restricted Net assets released— temporarily restricted 15,000 365,000 Net assets released— unrestricted General service expenses Program service expenses Fund-raising expenses 365,000 25,000 490,000 65,000 Cash General service expenses 580,000 8,000 Contributions of services— unrestricted Building 35,000 Contributions of services— unrestricted Solutions Manual, Chapter 13 8,000 35,000 ©Cambridge Business Publishers, 2013 25 Find more at www.downloadslide.com Irvine Services Statement of Activities For the Year 2013 Unrestricted Revenue, gains, and other support: Contributions revenue Contributions of services Investment income Unrealized gains Net assets released from program restrictions Total revenue, gains and other support Expenses and losses: General service expenses Program service expenses Fund-raising expenses Total expenses Change in net assets P13.8 $ 200,000 43,000 12,000 Temporarily Restricted $ 612,500 Permanently Restricted $ 200,000 15,000 365,000 620,000 33,000 490,000 65,000 588,000 $ 32,000 (365,000) 247,500 $ 247,500 215,000 $ 215,000 Accounting for Investments American Hereditary Disease Association Statement of Activities For the Year 2013 Temporarily Unrestricted Restricted Investment income—mortgage bonds -$ 60,000 Investment income—debentures $ 80,000 -Investment income—equity securities -420,000 Unrealized gains—mortgage bonds Unrealized gains—debentures 100,000 -Unrealized gains—equity securities 200,000 ©Cambridge Business Publishers, 2013 26 Permanently Restricted -$ 50,000 - Advanced Accounting, 2nd Edition Find more at www.downloadslide.com P13.9 Statement of Activities Milwaukee Art Museum, Inc Statement of Activities For the Year 2013 Temporarily Unrestricted Restricted Revenue, gains, and other support: Contributions revenue Investment income Unrealized gains Net assets released from restrictions Total revenue, gains, and other support Expenses and losses: Administrative expenses Membership development expenses Fund-raising expenses Educational programs expenses Research expenses Total expenses Change in net assets Net assets, beginning of year Net assets, end of year (1) $ 54,800,000 2,000,000 300,000 (2) 8,700,000 $ 10,800,000 2,500,000 200,000 (8,700,000) Permanently Restricted $ 600,000 400,000 65,800,000 4,800,000 1,000,000 3,900,000 6,000,000 1,500,000 40,000,000 15,000,000 66,400,000 (600,000) 22,000,000 $ 21,400,000 -4,800,000 24,000,000 $ 28,800,000 -1,000,000 6,000,000 7,000,000 $ (1) $56,000,000 - $1,200,000 (2) $3,500,000 + $4,000,000 + $1,200,000 P13.10 Complete Financial Statements Journal entries (not required): Contributions receivable Cash 50,000 4,200,000 Contribution revenue—UR Contribution revenue—TR To record 2013 pledges and cash collections for the year Net assets released from time restrictions—TR 140,000 Net assets released from time restrictions—UR Solutions Manual, Chapter 13 4,200,000 50,000 140,000 ©Cambridge Business Publishers, 2013 27 Find more at www.downloadslide.com Cash 140,000 Contributions receivable To record cash collections of 2012 pledges Allowance for uncollectibles 140,000 20,000 Contributions receivable To write off uncollectible pledges from 2012 20,000 Contribution revenue—TR 14,500 Allowance for uncollectibles 14,500 To adjust the allowance for uncollectibles balance to its correct ending balance of $2,500 (= $50,000 ending balance of contributions receivable x 5%) The allowance balance before adjustment is $(12,000) (= $8,000 - $20,000) State grant receivable Cash 400,000 600,000 State grant—temporarily restricted 1,000,000 To record state grant Expenses—program services Equipment 100,000 200,000 Cash To record expenditures for preschool program Net assets released from program restriction— temporarily restricted 300,000 300,000 Net assets released from program restrictions— unrestricted To record release from restrictions on state grant Cash 300,000 350,000 Contributions—temporarily restricted To record contributions for child development programs Equipment Expenses—program services Cash To record expenditures for child development programs ©Cambridge Business Publishers, 2013 28 350,000 350,000 50,000 400,000 Advanced Accounting, 2nd Edition Find more at www.downloadslide.com Net assets released from program restrictions— temporarily restricted 400,000 Net assets released from program restrictions— unrestricted 400,000 To record release from restrictions on contributions for child development programs ExpensesCadministrative (.2 x $3,330,000) Expenses—program services (.8 x $3,330,000) 666,000 2,664,000 Cash Salaries and wages payable To record salary and wage expenses for the year Expenses—program services Accounts payable 3,300,000 30,000 750,000 50,000 Cash To record expenses for utilities, food and supplies Expenses—program services Expenses—administrative 800,000 592,500 197,500 Equipment and furnishings (net) Building (net) To record depreciation for the year Short-term investments Cash To record short-term investment of excess cash Solutions Manual, Chapter 13 240,000 550,000 250,000 250,000 ©Cambridge Business Publishers, 2013 29 Find more at www.downloadslide.com Greenvale Community Day Care Center Statement of Activities For the year ended December 31, 2013 Temporarily Restricted Unrestricted Revenues and gains: Contributions State grant Net assets released from time restrictions Net assets released from use restrictions Total revenues, gains, and other support Expenses: Program services Administrative Total expenses Change in net assets Net assets, January Net assets, December 31 $ 4,200,000 $ 385,500 1,000,000 140,000 (140,000) 700,000 (700,000) 5,040,000 545,500 4,156,500 863,500 5,020,000 20,000 5,020,000 $ 5,040,000 545,500 970,000 $1,515,500 Greenvale Community Day Care Center Statement of Financial Position at December 31, 2013 Assets Current Assets Cash Short-term investments Contributions receivable (net) State grant receivable Fixed assets Equipment and furnishings (net) Building (net) Total assets Liabilities and net assets Current liabilities Accounts payable Salaries and wages payable Net assets Unrestricted Temporarily restricted Total liabilities and net assets ©Cambridge Business Publishers, 2013 30 $ 340,000 250,000 47,500 400,000 2,810,000 2,950,000 $ 170,000 72,000 5,040,000 1,515,500 $1,037,500 5,760,000 $6,797,500 $ 242,000 6,555,500 $6,797,500 Advanced Accounting, 2nd Edition Find more at www.downloadslide.com Greenvale Community Day Care Center Statement of Cash Flows For the year ended December 31, 2013 Cash flows from operating activities: Unrestricted contributions ($4,200,000 + $140,000 + $350,000) State grant Program expenses paid [$100,000 + $50,000 + (.8 x $3,300,000) + $800,000] Administrative expenses paid (.2 x $3,300,000) Net cash from operating activities $ 4,690,000 600,000 (3,590,000) (660,000) 1,040,000 Cash flows from investing activities: Equipment purchases ($200,000 + $350,000) Short-term investments acquired Net cash from investing activities (550,000) (250,000) (800,000) Net increase in cash Beginning cash balance Ending cash balance $ 340,000 100,000 440,000 $ 565,500 Reconciliation of change in net assets to net cash provided by operating activities Change in net assets Adjustments: Depreciation expense Decrease in contributions receivable, net Increase in state grant receivable Increase in salaries and wages payable Decrease in accounts payable Net cash provided by operations Solutions Manual, Chapter 13 790,000 104,500 (400,000) 30,000 (50,000) $ 1,040,000 ©Cambridge Business Publishers, 2013 31 Find more at www.downloadslide.com P13.11 Statement of Activities for a University Buena Vista University Statement of Activities For the Year 2013 Unrestricted net assets Revenues and gains: Tuition, net of financial aid Grants Investment income Gifts Unrealized gains Net assets released from restrictions ($650,000 + $5,200,000) Total revenues and gains Expenses: Instruction ($120,000,000 + $12,000,000 for TAs) Research programs Student services Administration Total expenses Change in net assets Net assets, beginning Net assets, ending ©Cambridge Business Publishers, 2013 32 $ 156,000,000 2,000,000 140,000 5,850,000 163,990,000 132,000,000 24,000,000 6,000,000 12,000,000 174,000,000 (10,010,000) 3,800,000 $ (6,210,000) Temporarily restricted net assets $ 280,000 9,600,000 Permanently restricted net assets $ 15,000,000 3,000,000 (5,850,000) 4,030,000 _ 18,000,000 - -4,030,000 4,000,000 $ 8,030,000 _ - _ -18,000,000 22,000,000 $ 40,000,000 Advanced Accounting, 2nd Edition Find more at www.downloadslide.com P13.12 Prepare Complete Financial Statements Journal entries (not required) (all numbers in thousands) Cash Contributions—unrestricted Cash Cash-restricted 150,000 150,000 950 5,050 Grant—temporarily restricted Grant—permanently restricted Grant—unrestricted Cash-restricted 5,000 50 950 1,500 Endowment—permanently restricted Contributions receivable 1,500 1,000 Contributions—temporarily restricted Cash 1,000 15,000 Contributions receivable Net assets released from time restrictions—TR 15,000 15,000 Net assets released from time restrictions—UR Contributions receivable 15,000 6,000 Contributions—temporarily restricted Contributions receivable 6,000 300 Contributions—temporarily restricted Cash 300 2,000 Contributions receivable Net assets released from time restrictions—TR 2,000 Net assets released from time restrictions—UR Solutions Manual, Chapter 13 2,000 2,000 ©Cambridge Business Publishers, 2013 33 Find more at www.downloadslide.com Unrealized loss—PR Unrealized loss—UR 3,000 5,500 Investments Cash—restricted 8,500 4,000 Contributions—PR Investments 4,000 4,000 Cash—restricted Property and equipment, net 4,000 12,000 Cash—restricted Cash Net assets released from use restrictions—TR 5,000 7,000 5,000 Net assets released from use restrictions—UR Cash 5,000 7,000 Investment income—UR Investment income—TR Expenses—wish granting Expenses—chapter support Expenses—fund-raising Expenses—mgmt and general 5,000 2,000 150,000 10,000 30,000 16,000 Property and equipment, net Accounts payable Cash Net assets released from use restrictions—TR 1,500 800 203,700 20,000 Net assets released from use restrictions—UR Expenses—mgmt and general 20,000 6,000 Contributions—services ©Cambridge Business Publishers, 2013 34 6,000 Advanced Accounting, 2nd Edition Find more at www.downloadslide.com a Make-A-Wish Foundation Statement of Activities For the Year 2014 Temporarily Unrestricted restricted (in thousands) net assets net assets Revenues and gains and losses: Cash contributions—public $ 150,000 Grants 950 $ 5,000 Service contributions 6,000 Investment income 5,000 2,000 Unrealized losses on investments (5,500) Promises of contributions 6,000 Interest on promises [5% x ($20,000+ $6,000)] 1,300 Net assets released: From time restrictions ($15,000 + $2,000) 17,000 (17,000) From use restrictions ($5,000 + $20,000) 25,000 (25,000) Total revenues and gains 198,450 (27,700) Expenses: Wish granting Chapter support Fund-raising Management and general ($16,000 + $6,000) Total expenses Change in net assets Net assets, beginning Net assets, ending Solutions Manual, Chapter 13 Permanently restricted net assets $ 5,500 50 (3,000) 2,550 150,000 10,000 30,000 22,000 212,000 (13,550) 135,000 $ 121,450 (27,700) 30,000 $ 2,300 2,550 18,000 $ 20,550 ©Cambridge Business Publishers, 2013 35 Find more at www.downloadslide.com Make-A-Wish Foundation Statement of Financial Position at December 31, 2014 (in thousands) Assets Cash Contributions receivable (net) Assets restricted to endowment and property Property and equipment (net) Investments Total assets Liabilities and net assets Liabilities: Accounts payable Notes payable Total liabilities Net assets Unrestricted Temporarily restricted Permanently restricted Total net assets Total liabilities and net assets ©Cambridge Business Publishers, 2013 36 $ 4,250 10,300 1,550 22,500 115,500 $ 154,100 $ 8,800 1,000 _9,800 121,450 2,300 20,550 144,300 $ 154,100 Advanced Accounting, 2nd Edition Find more at www.downloadslide.com b Make-A-Wish Foundation Statement of Cash Flows For the year ended December 31, 2014 (in thousands) Cash for operating activities: Contributions (1) Investment income Operating expenditures Net cash used for operating activities $ 167,950 7,000 (203,700) (28,750) Cash for investing activities: Investments Property and equipment Net cash used for investing activities (4,000) (12,000) (16,000) Cash from financing activities: Endowment Restricted to property and equipment Net cash provided from financing activities Net decrease in cash Beginning cash balance Ending cash balance ($4,250 + $1,550) (1) $167,950 = $150,000 + $950 + $15,000 + $2,000 5,550 5,000 10,550 (34,200) 40,000 $ 5,800 Reconciliation of change in net assets to net cash used for operating activities Change in net assets Adjustments: Endowment Restricted to property and equipment Depreciation expense Decrease in contributions receivable Unrealized investment losses Increase in accounts payable Net cash for operating activities Solutions Manual, Chapter 13 $ (38,700) (5,550) (5,000) 1,500 9,700 8,500 800 $ (28,750) ©Cambridge Business Publishers, 2013 37 ... assets ©Cambridge Business Publishers, 2013 $ 150,000 2,850,000 1,653,514 $ 4,653,514 Advanced Accounting, 2nd Edition Find more at www.downloadslide.com Geneva Preschool Statement of cash flows... 5,000 5,000 No entry; not an unconditional promise ©Cambridge Business Publishers, 2013 Advanced Accounting, 2nd Edition Find more at www.downloadslide.com No entry is made at the time of the promise,... securities 40,000 Unrealized gains (PR) ©Cambridge Business Publishers, 2013 14,000 40,000 Advanced Accounting, 2nd Edition Find more at www.downloadslide.com Account balances, end of 2014: Investment