Assume you are the accountant working for the Victoria Senior Center (VSC). Following are the preclosing trial balances of VSC as of December 31, 2020.
(in thousands)
|
|
Debit
|
Credit
|
Cash
|
|
$4,000
|
|
Cash (with donor restrictions)
|
|
600
|
|
Pledges receivable
|
|
1000
|
|
Allowance for uncollectible pledges
|
|
|
300
|
Pledges receivable (with donor restrictions)
|
|
500
|
|
Investments
|
|
3200
|
|
Accrued interest receivable
|
|
100
|
|
Net assets, January 1, 2020
|
|
|
6700
|
Net assets (with donor restrictions), January 1, 2020
|
|
2000
|
|
Contributions
|
|
|
1000
|
Contributions (with donor restrictions)
|
|
|
500
|
Membership dues
|
|
|
1500
|
Program service fees
|
|
|
3000
|
Grant from county
|
|
|
2500
|
Grant from state
|
|
|
2500
|
Unrealized and realized gains on investments
|
|
|
200
|
Investment income
|
|
|
100
|
Luncheon program expenses
|
|
7200
|
|
Recreation program expenses
|
|
3400
|
|
Administration and fundraising expenses
|
|
300
|
|
Net assets with donor restrictions – released from restrictions
|
|
400
|
|
Net assets without donor restrictions – released from restrictions
|
|
|
400
|
(1) Prepare a statement of financial position a statement of activities at and for the year ended December 31, 2020.
(2) After reviewing the financial statements, the trustees of VSC want you to make the following changes. How do you respond?
a. VSC spent $5,000 to prepare and mail a brochure to potential contributors. The brochure contained general information about the center, described its accomplishments, pointed out that a contribution of $10 would provide 1 free dinner to a senior citizen in town. The trustees want you to record the cost to the Luncheon program.
b. Professional lawyers volunteered to perform all the legal services required by VSC. The trustees have questions about the legal fees recorded in the administration expense account, and tell you: “We didn’t pay for these services, so there’s really no point in recording any expenses for them.”
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