1.It received a $10,000,000 endowment contribution, all in stocks and bonds.
2.It received $3,000,000 in additional contributions, all restricted for its educational programs and $2,300,000 in unrestricted contributions.
3.It acquired $800,000 in furniture, fixtures, and equipment, all of which have an expected useful life of 10 years.
4.It recognized depreciation on the furniture, fixtures, and equipment, purchased earlier in the year.
5.It spent $2,400,000 on educational programs.
6.It earned $300,000 in interest and dividends on its endowment investments.
7.By year-end the value of its investments had appreciated by $600,000.
8.It incurred $1,300,000 in administrative expenses.
Near year-end it received a pledge of $4,500,000, to be fulfilled in three annual installments of $1,500,000 beginning in one year. The Association determined that a discount rate of 6 percent was appropriate.
- a.Prepare journal entries to record these events and transactions. Be sure to indicate the fund-type in which the entry would be made.
- b.Prepare a year-end statement of financial position and statement of activities.
- 3) Internet-based exercise.
- Access the website of the American Red Cross (www.redcross.com) and the American Diabetes Association (www.diabetes.org) and obtain the audited financial statements for the fiscal year 2011 and Form 990 for 2011. Form 990 can also be obtained from www.GuideStar.org. Answer the following questions for each organization.
1.What standards were applied in conducting the audit? Was the audit a Single Audit? How do you know? What reports result from single audit?
2.Identify the federal agencies (Hint: agencies are usually titled U.S. Department of …) that have extended grants to these organizations. Are these the agencies that you would expect? Why or why not?
3.For the fiscal year 2011, identify (1) any significant deficiencies or material weaknesses in the organization’s internal controls over major programs, (2) any instances of noncompliance in major programs, and (3) any findings or questioned costs.