Question

For Youth Agency (FYA) is a voluntary health and welfare organization that provides counseling and recreation...

For Youth Agency (FYA) is a voluntary health and welfare organization that provides counseling and recreation programs for youthful offenders and delinquents. FYA’s programs are financed through a contract with the county in which it is located and through contributions from local citizens. Its contract with the county provides for reimbursement of allowable costs based on monthly billings to the county. FYA uses the accrual basis of accounting, and the following transactions occurred during 2021:

1. FYA received cash in the amount of $25,000, to be used as the FYA board of directors considers appropriate.

2. FYA received a gift of Intel stock that had a fair market value of $1,300 total at the time of the gift. The donor sent FYA’s president a letter with the gift, saying that proceeds of the stock should be used only to purchase athletic equipment for the basketball team. FYA sold the stock upon receipt.

3. FYA paid $800 cash for athletic equipment, using some of the proceeds received in Transaction 2. The expense was charged to the Recreation programs account.

4. FYA spent $12,000 cash on the following: $8,000 for counseling programs, $3,000 for recreation programs, and $1,000 for administration.

5. FYA billed the county $6,500 for costs incurred under its contract.

6. A licensed social worker in the area donated 100 hours of her time to FYA. Her normal hourly rate is $50 per hour. The CEO appreciates the donation because otherwise he would have to purchase the counseling services.

7. FYA borrowed $10,000 from the local bank on an unsecured note. The whole amount will be repaid next year.

8. FYA paid the local bank $1,600, of which $400 was interest.

9. FYA recorded $300 of depreciation for the year.

10. FYA prepaid next year’s rent of $12,000.

11. FYA determined that it will not be able to collect $2,500 of pledges.

Record the above transactions. Then, using the beginning balances in this table, produce the balance sheet, activity statement, and cash flow statement.

Account

Balance

Cash

$2,000

Contracts Receivable

1,000

Equipment

2,500

Net Assets without Donor Restrictions

6,000

Pledges Receivable, Net of Allowance

500

MUST use this template to complete.

Problem 11-17
SOLUTION
Transactions Worksheet
Assets Liabilities Net Assets
Cash Pledges Receivable, net Contract Receivables Investments Prepaid Expense Equipment Note Payable Without Donor Restrictions With Donor Restrictions
Beginning Balance $2,000 $500 $1,000 $0 $0 $2,500 $0 $6,000 $0
1 Donation Revenue
2a Donation Revenue
2b
3a Net Asset Released from Restriction Net Asset Released from Restriction
3b Recreation Expense
4 Counseling Expense
Recreation Expense
Administration Expense
5 Contract Revenue
6 Donated Services
Donated Services
7
8 Interest Expense
9 Depreciation Expense
10
11 Bad Debt Expense
Ending Balance $2,000 $500 $1,000 $0 $0 $2,500 $0 $6,000 $0

Homework Answers

Answer #1

Sol:

Transaction worksheet
Transaction particulasrs Debit Credit
Cash on pledged 17000
Athletic equipment 800
Counselling programs 8000
Recreation programs 3000
Administration 1000
Borrowings from bank 10000
Repayment to bank 1600
Prepaid rent 12000
Excess of debit over credit 600
27000 27000
Opening Addition Depreciation Clsoing
Cash 2000 600 2600
Contracts receivable 1000 6500 7500
Equipment 2500 800 300 3000
Pledges receivable 500 6500 7000
Unrestricted net assets 6000 0 0 6000
Restricted 0 500 0 500
Borrowings from bank 0 10000 1200 10000 Cr
Prepaid rent 0 12000 0 12000
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