PROBLEM 19-5 Journal Entries—Financial Statements—Library
Preston Library, a nonprofit organization, presented the following statement of financial position and statement of activities for its fiscal year ended February 28, 2007.
Preston Library
Statement of Financial Position
February 28, 2007
Temporarily
Assets Unrestricted Restricted
Current Assets
Cash $ 285,000 $80,000
Grants Receivable 80,000
Prepaid Expenses 65,000
Total 430,000
Investments (at market) 1,020,000
Land, Building, and Equipment
(less accumulated depreciation of $50,000) 530,000
Total Assets $1,980,000 $80,000
Liabilities and Fund Balances
Current Liabilities
Accounts Payable and Accrued Expenses $ 150,000
Total 150,000
Long-Term Debt 200,000
Fund Balances 1,630,000 80,000
Total Liabilities and Fund Balances $1,980,000 $80,000Preston Library
Statement of Activities
for Year Ended February 28, 2007
Temporarily
Support and Revenue Unrestricted Restricted
Support
Grants $ 70,000 $—0—
Gifts 300,000 80,000
Total 370,000 80,000
Revenue
Service Fees 22,000
Book Rentals and Fines 107,000
Investment Income 71,000
Total 200,000 —0—
Total Support and Revenue $ 570,000 $80,000
Expenses
Program Services
Circulating library $ 212,000
Research library 86,000
Exhibits 20,000
Community services 10,000
Total 328,000 —0—
Supporting Services
General and administrative 175,000
Fund raising 111,000
Total 286,000 —0—
Total Expenses 614,000 —0—
Increase (decrease) in net assets (44,000) 80,000
Fund Balances—beginning of year 1,674,000 —0—
Fund Balances—end of year $1,630,000 $80,000
The following transactions occurred during the fiscal year ended February 28, 2008.
1. Fees were billed as follows:
Service fees $30,000
Book rentals 43,000
Book fines 78,000
2. $40,000 of the Grant Receivable was received. Another grant in the amount of $20,000 was promised.
3. Contributions in the amounts summarized below were received:
Unrestricted $215,000
Restricted 108,000
4. Investment income totaled $75,000 for the year.
5. Vouchers for the year were approved as follows:
Circulating library $189,000
Research library 74,000
Exhibits 15,000
Community services 12,000
General and administrative 166,000
Fund raising 103,000
Total $559,000
6. During the year, $500,000 worth of vouchers were paid.
Adjustment Data
7. Accounts Payable and Accrued Expenses at February 28, 2008, should be $217,000. The difference should be allocated to the following expenses:
Research library $5,000
General and administrative 3,000
8. Additions to the research library in the amount of $68,000 that were approved in (5) above were made in accordance with the terms of a contribution that had been received earlier and that was restricted for that purpose.
9. The current market value of the investments is $1,035,000 (no investment transactions occurred).
10. Depreciation amounted to $9,000 for the year. It should be allocated as follows:
Circulating library $3,500
Research library 2,900
General and administrative 2,600
11. Prepaid Expenses should be $60,000. The difference should be allocated to:
Exhibits $3,700
General and administrative 1,300
Required:
A. Prepare journal entries to record the transactions.
B. Prepare the statement of financial position and the statement of activities for the year ended February 28, 2008.
Click here for the solution: Preston Library, a nonprofit organization, presented the following statement of financial position and statement of activities
