Question

13-20 Recording Revenue and Related Expense Transactions. The Shannon Community Kitchen provides hot meals to homeless and low-income individuals and families; it is the organization's only program. It is the policy of the community kitchen to use temporarily restricted resources for which the purpose has been met before unrestricted resources. The Kitchen had the following revenue and expense transactions during the 2017 fiscal year.

1. Unrestricted cash donations of $25,000 we're received. A local philanthropist also contributed $3000, which was to be used for the purchase of Thanksgiving dinner foodstuffs.

2. A local grocery store provided fresh produce with a fair value of $100. The produce was immediately used.

3. Volunteers from the local university contributed 100 hours to preparation and serving of meals. The estimated fair value of their labor was $750.

4. The Kitchen received a $5000 federal grant for the purchase of institutional kitchen appliances.

5. At Thanksgiving time, the Kitchen spent $4,100 on foodstuffs for preparation of the Thanksgiving dinner.

REQUIRED

Make all the necessary journal entries to record these transactions.

Answer 1

Answer:-

THE SHANNON COMMUNITY

KITCHEN GENERAL JOURNAL

Particulars Debits Credits

1.CASH DEBIT 28,000

CONTRIBUTIONS—UNRESTRICTED Credit 25,000

CONTRIBUTIONS—TEMPORARILY RESTRICTED Credit 3,000

2.PROGRAM EXPENSES Debit 100

CONTRIBUTIONS—UNRESTRICTED Credit 100

3.NO TRANSACTION IS RECORDED – MEAL SERVICE AND PREPARATION DOES NOT REQUIRE A SPECIALIZED SKILL

4.CASH Debit 5,000

CONTRIBUTIONS—TEMPORARILY RESTRICTED Credit 5,000

5.PROGRAM EXPENSES Debit 4,100

CASH Credit 4,100