Create a journal entry with likely account names from a typical nonprofit organization's chart of accounts and the dollar amounts to be debited and credited. If no journal entry is required, please indicate so. 1. A wealthy citizen gave $175,000 to a local not-for-profit organization (NFP) with the restriction that only it could be spent at the discretion of the officers of the NFP but not until next year. 2. A nurse anestheticist from a religious order that has taken a vow of poverty works full-time for a not-for-profit hospital without receiving a paycheck. A typcial nurse's salary for this type of work is $110,000 per year. |
Journal Entries in the books of Non Profit Organisation:
1) As the organoisation is receiving amount from a wealthy citizen, it is treated as donation to the Organisation. The restriction kept by the donor is a paper rule, it can't be passed as a journal entry.
Cash a/c Dr $175,000
To Donation a/c $175,000
(Being donation received for the Organisation)
2) Actually the payment for the same type work is $110,000 per year, but this nurse has taken a vow and not accepting any payment from the Organisation. So there is no payment for her and there is no need to pass journal entry.
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