Student Name: InstructorClass: McGraw-Hill/Irwin

Problem 18-34

Local Not-for-profit Health Care EntityGeneral Journal

a. Investments - Internally Restricted 160,000 Cash 160,000

b. Cash 80,000 Contributed Support - Permanently Restricted Net Assets 80,000

c. Inventory of Medicines 25,000 Cash 25,000

Reclassification - Temporarily Restricted Net Assets 25,000 Reclassification - Unrestricted Net Assets 25,000

d. Accounts Receivable - Patients 120,000 Accounts Receivable - Third Party Payors 480,000

Patient Service Revenues 600,000

e. Depreciation Expense 38,000 Accumulated Depreciation 38,000

f. Cash 15,000 Interest Revenue - Unrestricted Net Assets (Internally 15,000

g. Bad Debts Expense 20,000 Allowance for Uncollectible Accounts 20,000

Contractual Adjustment 30,000 Allowance for Reduced Charges 30,000

h. Supplies Expense 25,000 Inventory of Medicines 25,000

i. Cash 172,000 Investments - Internally Restricted 160,000 Gain on Sale of Investments - Unrestricted Net Assets 12,000

Equipment 212,000 Cash 212,000

Reclassification - Temporarily Restricted Net Assets 25,000 Reclassification - Unrestricted Net Assets 25,000

j. Cash 12,600 Pledges Receivable 98,000

Allowance for Uncollectible Pledges 9,000 Contributed Support - Unrestricted Net Assets 12,600 Contributed Support - Temporarily Restricted Net Assets 89,000

Student Name: InstructorClass: McGraw-Hill/Irwin

Problem 18-34

Local Not-for-profit Health Care EntityChanges in Net Asset Classifications

For the Year Ended December 31, 2008

Temporarily PermanentlyUnrestricted Restricted Restricted

a. Announced equipment acquisition plan; invested funds - - - b. Received donation for nursing salary supplements - - 80,000 c. Expended money for medicines 25,000 (25,000) - d. Charged patients 600,000 - - e. Recorded depreciation expense (38,000) - - f. Received interest income on investments from item a 15,000 - - g. Estimated bad debts (20,000) - -

Contractual Adjustment (30,000) - - h. Medications from c were consumed (25,000) - - i. Investments sold 12,000 - -

Equipment purchased 25,000 (25,000) - j. Pledges received 12,600 89,000 -

Increase (Decrease) in Net Assets 576,600 39,000 80,000 Correct! Correct! Correct!

Given P18-34:

Local Not-for-profit Health Care Entity:

a. Announced equipment acquisition plan; invested funds $ 160,000 b. Received donation for nursing salary supplements 80,000 c. Expended money for medicines 25,000 d. Charged patients 600,000

Portion to be paid by third-party payors 80%e. Recorded depreciation expense $ 38,000 f. Received interest income on investments from (a.) 15,000 g. Estimated as uncollectible accounts 20,000

Contractual adjustments expected by third-party payors 30,000 h. Medications from (c.) were consumed 25,000 i. Investments from (a.) were sold 172,000

Equipment purchased 25,000 j. Unrestricted pledges received 126,000

Pledges paid immediately 10%Pledges estimated as uncollectible $ 9,000 Present value of receivables 98,000

Student Name: InstructorClass: McGraw-Hill/Irwin

Problem 18-35

UNIVERSITY OF DANVILLEGeneral Journal

a. Tuition Receivable 1,200,000 Tuition Revenue 1,200,000

b. Investments 300,000 Contributions-Permanently Restricted 300,000

c. Cash 700,000 Contributions-Temporarily Restricted 700,000

d. Scholarships-Financial Aid 100,000 Tuition Receivable 100,000

e. Salary Expenses 310,000 Cash 310,000

f. Salary Expenses 80,000 Contributed Service Revenues 80,000

g. Equipment 200,000 Cash 200,000

Temporarily Restricted Assets-Reclassification 200,000 Unrestricted Net Assets-Reclassification 200,000

h. Investments 30,000 Unrealized Gain on Investments 30,000

i. Cash 9,000 Dividend Revenue-Unrestricted Net Assets 9,000

j. Depreciation Expense 32,000 Accumulated Depreciation 32,000

k. Cash-Internally Restricted 100,000 Cash 100,000

l. Pledge Receivable 7,000 Contributions-Temporarily Restricted 7,000

m. No entry

n. Utilities and Other Expenses 212,000 Cash 212,000

o. No entry

Student Name: InstructorClass: McGraw-Hill/Irwin

Problem 18-35

UNIVERSITY OF DANVILLEStatement of Activities

Temporarily PermanentlyUnrestricted Restricted RestrictedNet Assets Net Assets Net Assets Total

Revenues and Gains:Tuition Less Scholarships 1,100,000 1,100,000 Unrealized Gain in Investments 30,000 30,000 Dividend Revenue 9,000 9,000

Contributions:Cash and Other Assets 707,000 300,000 1,007,000 Services 80,000 80,000

Total Revenues, Gains, and Contributions 1,189,000 707,000 330,000 2,226,000 Net Assets Released from Restriction 200,000 (200,000) -

Totals 1,389,000 507,000 330,000 2,226,000

Operating Expense:Salaries 390,000 390,000 Depreciation 32,000 32,000 Utilities and Other Expenses 212,000 212,000

Total Expenses 634,000 634,000 Increase in Net Assets 755,000 507,000 330,000 1,592,000 Net Assets-Beginning of Year 400,000 200,000 100,000 700,000 Net Assets-End of Year 1,155,000 707,000 430,000 2,292,000

Correct! Correct! Correct! Correct!

Given P18-35:

UNIVERSITY OF DANVILLE

Current year net assets:Total $ 700,000 Unrestricted 400,000 Temporarily restricted 200,000 Permanently restricted 100,000

Transactions occurring during the year:a. Tuition charged $1,200,000 b. Donation of investments - cost to owner 100,000

Value at time of gift 300,000 c. Cash donated for laboratory equipment 700,000 d. Scholarships given to students 100,000 e. Salary expenses paid 310,000 f. Faculty member contributes services 80,000 g. Money from (c.) spend on laboratory equipment 200,000 h. Investments from (b.) valued at year end 330,000 i. Dividends received from investments from (b.) 9,000 j. Depreciation expense computed 32,000 k. Unrestricted assets set aside for purchase of library books 100,000 l. Money promised to school in 3 years 10,000

Present value of this money 7,000 m. Value of art object received as gift 70,000 n. Utilities and other expenses paid 212,000 o. Value of services donated to library 103,000

Student Name: InstructorClass: McGraw-Hill/Irwin

Problem 18-39

Pledges Receivable 20,000 Contribution revenue - Interest-unrestricted net assets 20,000

Cash 100,000 Allowance for uncollectible pledges 4,000

Pledges Receivable 104,000

Cash 180,000 Contributions revenue-Unrestricted net assets 180,000

Salary Expense 90,000 Cash 90,000

Reclassification-Temporarily restricted net assets 15,000 Reclassification-Unrestricted net assets 15,000

Cash 12,000 Contributions revenue-Temporarily restricted 12,000

Land, Buildings & Equipment 500,000 Note Payable 450,000 Cash 50,000

Reclassification-Temporarily restricted net assets 50,000 Reclassification-Unrestricted net assets 50,000

Cash 30,000 Membership revenue-Unrestricted net assets 30,000

Cash 30,000 Investment revenue-Unrestricted net assets 30,000

WATSON FOUNDATIONStatement of Activities

For the Year Ending December 31, 2007Temporarily Permanently

Unrestricted Restricted RestrictedNet Assets Net Assets Net Assets

Contributions revenue 180,000 161,000 Contributions - Interest revenue 20,000 6,000 Investment revenue 30,000 Membership revenue 30,000

Total revenues 260,000 167,000 - Net assets release from restriction 65,000 (65,000)Total revenues and net assets released from restriction 325,000 102,000 -

Expenses:

General and administrativeRent (12,000)Salary (90,000)Advertising (15,000)Utilities (16,000)Depreciation (40,000)Interest (15,000)

Total expenses (188,000) - -

Excess of total revenues and net assets 137,000 102,000 - released from restriction over expenses

Net assets at beginning of year 400,000 100,000 300,000 Net assets at end of year 537,000 202,000 300,000

Correct! Correct! Correct!

WATSON FOUNDATIONStatement of Financial Position

December 31, 2008

ASSETSCash $ 254,000 Pledges receivable (net) 275,000 Investments 300,000 Land, buildings, and equipment (net) 660,000

Total assets 1,489,000 Correct!

LIABILITIESNotes payable 450,000

Correct!

NET ASSETSUnrestricted $ 537,000 Temporarily restricted 202,000 Permanently restricted 300,000 $1,039,000

Correct!

AccountNamesAllowance for uncollectible pledgesCashContribution revenue - Interest-unrestricted net assetsContributions revenue-Temporarily restrictedContributions revenue-Unrestricted net assetsInvestment revenue-Unrestricted net assetsLand, Buildings & EquipmentMembership revenue-Unrestricted net assetsNote PayablePledges ReceivableReclassification-Temporarily restricted net assetsReclassification-Unrestricted net assetsSalary Expense

Given P18-39:

WATSON FOUNDATION

Beginning balances:Cash $ 100,000 Pledges receivable (net) 200,000 Investments 300,000 Land, buildings and equipment 200,000 Unrestricted net assets 400,000 Temporarily restricted net assets 100,000 Portion to be used for new building 50%Permanently restricted net assets 300,000

Transactions occurring during the year:Interest computed on the pledge receivable $ 20,000 Cash received on pledges 100,000 Pledges written off as uncollectible 4,000 Unrestricted cash gifts received 180,000 Salaries paid 90,000 Portion of salaries paid from restricted funds 15,000 Cash gift received to be given to another organization 12,000 Building purchased 500,000 Long-term note signed for purchase 450,000 Remainder paid for with restricted funds 50,000 Membership dues collected 30,000 Income generated by permanently restricted net assets 30,000 Rent paid 12,000 Advertising paid 15,000 Utilities paid 16,000 Unrestricted pledge received, to be collected in 5 years 200,000 Present value of pledge 149,000 Interest recognized 6,000 Depreciation computed 40,000 Interest paid on note signed to acquire building 15,000