4650FS_-_Example_1 - ACCT 4650 - Example I (No Capital...

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ACCT 4650 - Example I (No Capital Assets) Basic Data Organization And Purpose On January 1, 2008, the Local Care Society (LCS) is organized as a not-for-profit organization. Its purpose is to serve the needs of its local community in two areas: The provision of meals for elderly individuals who are unable to leave their homes (meals activity). The provision of winter clothing for children who are living in poverty (clothing activity). The organization will have a December 31 year end. Endowment Contributions Initial funding is provided by a wealthy individual who makes an endowment contribution of $50,000. These funds are invested in debt securities. There are no restrictions on the income that is produced by these investments. During the year ending December 31, 2008, such income amounted to $4,000. Unrestricted Contributions The organization solicits and receives unrestricted contributions which are then allocated to both meals activity and clothing activity by the organization's Board of Directors. During the year ending December 31, 2008, $400,000 in contributions were received. At year end, an additional $35,000 in contributions were receivable. The Board believes that this is a reasonable estimate of the amount that will actually be collected. This total was allocated $285,000 to meals activity and $150,000 to clothing activity. Restricted Contributions The organization accepts additional contributions that are restricted to use in the clothing activity. These funds are segregated and a separate report is made to contributors on their usage. During the year ending December 31, 2008,
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This note was uploaded on 02/18/2012 for the course ACCT 4650 taught by Professor Jemery during the Spring '12 term at Kwantlen Polytechnic University.

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4650FS_-_Example_1 - ACCT 4650 - Example I (No Capital...

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