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00.00 - Assignment 3 - Accounting 356v6 Assignment 3...

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Accounting 356v6 Assignment 3 Prepare your answers in a single file. Question Marks Concept Covered 1 30 Not-for-Profit Accounting 2 15 Customer Profitability 3 15 Sales Variances 4 20 Project Costing and Risk 5 10 BSC for Not-for-Profits 6 5 Customer Profitability Analysis 7 5 Risk Management Total Marks 100 Question 1: Not-for-profit Accounting (30 marks) City Youth Services (adapted from CMA Entrance Exam Syllabus 2006) City Youth Services (CYS) is a not-for-profit organization established to provide counselling and other services to children under the age of 18. It concentrates on troubled teenagers who are typically referred to CYS by the courts, police, and hospitals. In years past, the majority of the operating budget of CYS has been funded by the Provincial Government; increasingly, however, CYS is turning to private donors for support. Two years ago, CYS engaged in a major funding drive in order to raise funds for a group home for troubled teenagers. The drive was a success; $110,000 was raised during 2009 and a mortgage of $90,000 was negotiated so that CYS was able to purchase a house for $200,000 in January 2010. Since then, CYS continued fundraising activities and was able to raise $125,000 in donations in 2010. The funds raised annually for the group home are used to employ several in-house social workers on an hourly basis and pay the home’s operating expenses. CYS has continued to operate in separate rented premises and employs 12 social workers to provide counselling. Increasingly, time spent by the regular social workers has involved overload work related to the group home that cannot be handled by in-house social workers. As a result of the increase in this work (and the resulting increase in the payroll costs of regular CYS social workers) CYS is currently running a deficit in its operating fund. Fundraising for the counselling activities, which is separate from fundraising for the group home, has been insufficient to offset the operating deficit. A major fundraising drive to secure donations for CYS and the group home is planned for 2011. Page 1 of 7
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Twenty volunteers from the community have assisted the social workers in the group home and in the regular counselling services. Two of these volunteers have also assisted with clerical duties in the office. You are Mary Jones, CMA, a friend of the Executive Director of CYS, James Smith. You attended a meeting of the Board of Directors of CYS, where Smith said the following: As you know, Mary, our needs for private donations are greater than ever, especially with government funding freezes. The trouble with private donations is that we are competing with so many other worthwhile causes. Some of the people we approach for donations have complained about a lack of information regarding where we spent past donations, our current financial position, and our effectiveness in achieving the purposes for which we receive money.
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