Filters
Question type
Study Flashcards

The Khoo Music Society, a not-for-profit organization, is purchasing musical instruments to donate to some local schools. Khoo ordered the instruments on August 1, 20X1, and requested the following delivery schedule:  September 15,20X1 woodwinds ($3,000)  October 15,20X1 strings ($5,000)  October 31,20X1 brass ($6,000)  November 15,20X1 drums ($6,000) \begin{array}{|l|c|c|}\hline\text { September } 15,20 \mathrm{X} 1 & \text { woodwinds } & (\$ 3,000) \\\hline \text { October } 15,20 \mathrm{X} 1 & \text { strings } & (\$ 5,000) \\\hline \text { October } 31,20\mathrm{X} 1 & \text { brass } & (\$ 6,000) \\\hline \text { November } 15,20\mathrm{X} 1 & \text { drums } & (\$ 6,000) \\\hline\end{array} Khoo uses an encumbrance system and has properly recorded the necessary journal entry at August 1, 20X1. At November 15, 20X1, which of the following accounts should be debited and which statement will be affected?


A) Estimated commitments/statement of operations
B) Encumbrances-instruments/statement of operations
C) Estimated commitments/statement of financial position
D) Encumbrances-instruments/statement of financial position

E) A) and D)
F) C) and D)

Correct Answer

verifed

verified

Sparrow Pension Plan is a not-for-profit organization that administers the pension fund held for the employees of Sparrow Tech Ltd. What type of fund is the pension fund?


A) Reserve fund
B) Self-sustaining fund
C) Fiduciary fund
D) Endowment fund

E) C) and D)
F) A) and B)

Correct Answer

verifed

verified

The Parish Council of Holy Trinity Church has decided to seek the advice of an accountant in preparing their financial statements. The records are in a disorganized state; however, certain information has been assembled. Exhibit 10-1 is a summary of the fund balances at December 31, 20X5, and Exhibit 10-2 provides a summarized listing of the transactions for the year 20X6. Required: a. In general journal form, prepare summary journal entries to record the information in Exhibit 10-2. Keep the funds separate by classifying them as follows: Operating fund: OFImprovements fund: IF Window fund:WF Mission and outreach fund:MFEndowment fund: EF\begin{array}{lll}\text {Operating fund: }&OF\\\text {Improvements fund: }&IF\\\text { Window fund:}&WF\\\text { Mission and outreach fund:}&MF\\\text {Endowment fund: }&EF\\\end{array} b. Prepare a consolidated statement of financial for the funds of Holy Trinity Church at December 31, 20X6. Exhibit 10-1 Summary Of Fund Balances December 31,20X5 31,20X5  Operating fund $3,200 Improvements fund 4,400 Window fund 18,000 Mission and outreach fund  NIL  Endowment fund 44,000‾ Total funds $,69,600\begin{array}{ll}\text { Operating fund } & \$ 3,200 \\\text { Improvements fund } & 4,400 \\\text { Window fund } & 18,000 \\\text { Mission and outreach fund } & \text { NIL } \\\text { Endowment fund } & \underline{44,000} \\\text { Total funds } & \$, 69,600\end{array} Description of Funds: The operating fund is used to record all regular church receipts and operating expenses. The improvements fund is used to record all major acquisitions of property, plant, and equipment and is financed by allocations from the operating fund or by special donations. The window fund is a temporary fund established to enhance the church with stained-glass windows. (This fund is financed by special fundraising events and by special donations.) The mission and outreach fund provides funds to overseas and local outreach projects. It is financed by contributions from the church members, which have been specifically designated to this fund. The interest from the endowment fund is paid directly to the operating fund, but the principal cannot be spent. The fund is substantially financed by donations from estates. The entire sum of $44,000 has been invested in term deposits. All funds are operated out of the same bank account on the cash basis of accounting. Exhibit 10-2 SUMMARY LISTING OF 20X6 TRANSACTIONS 1. Received regular weekly collections totalling $104,000 for the year. 2. Other donations during the year included: $27,000\$ 27,000 for the mission and outreach fund $6,500\$ 6,500 for the window fund $2,000\$ 2,000 for the improvements fund $10,000\$ 10,000 for the endowment fund, invested in term deposits 3. The $12,000 budgeted for the improvements fund was allocated from the operating fund. 4. Salaries of $66,500 were paid. 5. Operating expenses of $29,000 were paid, of which $4,300 were owing at December 31, 20X5. At December 31, 20X6, $4,200 of payables remained unpaid. 6. A special fundraising dinner was undertaken to raise money for the window fund. Dinner tickets were sold for $3,200 and expenses of $450 for food and $150 for entertainment were paid. 7. Two stained-glass windows were installed during the year at a cost of $21,000, of which $19,000 was paid. Further, a window costing $8,500 was ordered for delivery in 20X7. 8. An amount of $24,000 was paid out of the mission and outreach fund for an African relief fund and $3,000 was paid to a local food bank. 9. The improvements fund was used to pay for a $17,500 roof repair, and $4,800 for a new piano. 10. Interest in the amount of $4,100 was received by the operating fund from the endowment.

Correct Answer

verifed

verified

a. 1. \(\begin{array}{lll} \text { Cash } & 104,000 \\ \text { OF Weekly collections } & 104,000 \end{array}\) 2. \(\begin{array}{lll}&\text { Cash }&45,500\\ \text { MF } & \text { Mission and outreach fund receipts } & 27,000 \\ \text { WF } & \text { Window fund receipts } & 6,500 \\ \text { IF } & \text { Improvements fund receipts } & 2,000 \\ \text { EF } & \text { Endowment funds receipts } & 10,000 \end{array}\) Term Deposits\(\quad\)\(\quad\)10,000 Cash\(\quad\)\(\quad\)10,000 3. OF Trensfer to improvement fund \(\quad\)\(\quad\)12,000 IF Transfer from operating fund\(\quad\)\(\quad\)12,000 4. OF Salaries expense\(\quad\)\(\quad\)66,500 Cash\(\quad\)\(\quad\)66,500 5. OF Operating expenses\(\quad\)\(\quad\)29,000 Cash\(\quad\)\(\quad\)29,000 Note: The cash paid out is the only amount recognized in the accounts, as the cash basis of accounting is in use. b. \(\begin{array}{ll} \text { Cash } & 2,600 \\ \text { WF Food expense } & 450 \\ \text { WF Entertainment expense } & 150 \\ \text { WF Dinner ticket receipts } &&3,200 \end{array}\) 7. \(\begin{array}{llr} \text { WF Windows replaced} &19,000\\ \text { Cash } &&19,000\\ \end{array}\) Note: Costs incurred but not paid are not entered. 8. \(\begin{array}{ll} \text { MF African relief } & 24,000 \\ \text { MF Food bank } & 3,000 \\ \text { Cash } &&27,000 \end{array}\) 9. \(\begin{array}{llr} \text { If Root repair expenses } &17,500\\ \text {IF Piano } &4,800\\ \text { Cash }& &22,300 \end{array}\) 10. \(\begin{array}{llr} \text {Cash } &4,100\\ \text { OF Interest from endowments } &&4,100\\ \end{array}\) b. \(\text {Holy Trinity Church}\) \(\text {Consolidated Statement of Financial Position}\) \(\text {December 31, \( 20X6 \)}\) Assets \[\begin{array} { l l } \text { Cash } & \$8, 000 \\ \text { Term deposits } & \underline{ 5 4,000 \quad 44,000 + 10,000} \\ & \underline{ \$ 62,000} \end{array}\] Funds \(\begin{array}{ll} \text {Operating fund}&\$ 3,800 \quad3,200+104,000-12,000-66,500-29,000+4,100 \\ \text {Improvements fund}&(3,900) \quad 4,400+2,000+12,000-22,300\\ \text {Window fund}&8,100 \quad 18,000+6,500-600+3,200-19,000 \\ \text {Mission and outreach fund}&- \quad\quad\quad 27,000-27,000 \\ \text {Endowment fund}&54,000 \quad \underline{44,000+10,000 }\\ &\underline{\$ 62,000} \end{array}\)

Which statements are affected by inter-fund loans?


A) Statement of operations and consolidated statements
B) Statement of financial position of the individual funds and consolidated statements
C) Statement of operations and statement of financial position of the individual funds
D) Statement of financial position of the individual funds and statement of changes in net assets

E) A) and B)
F) B) and C)

Correct Answer

verifed

verified

D

The Khoo Music Society, a not-for-profit organization, is purchasing musical instruments to donate to some local schools. Khoo ordered the instruments on August 1, 20X1. Khoo uses an encumbrance system. What journal entry should Khoo make at August 1, 20X1?


A)  DR Encumbrances-instruments 20,000 CR Estimated commitments 20,000\begin{array} { | c | c | } \hline \text { DR Encumbrances-instruments } & 20,000 \\\hline \text { CR Estimated commitments } & 20,000 \\\hline\end{array}
B)  DR Encumbrances-instruments 20,000 CR Accounts payable 20,000\begin{array} { | l | c | } \hline \text { DR Encumbrances-instruments } & 20,000 \\\hline \text { CR Accounts payable } & 20,000 \\\hline\end{array}
C)  DR Estimated commitments 20,000 CR Encumbrances-instruments 20,000\begin{array} { | l | c | } \hline \text { DR Estimated commitments } & 20,000 \\\hline \text { CR Encumbrances-instruments } & 20,000 \\\hline\end{array}
D)  DR Estimated commitments 20,000 CR Accounts payable 20,000\begin{array} { | c | c | } \hline \text { DR Estimated commitments } & 20,000 \\\hline \text { CR Accounts payable } & 20,000 \\\hline\end{array}

E) All of the above
F) B) and C)

Correct Answer

verifed

verified

A

Showing 1 - 5 of 5

Related Exams

Exam 1

Setting the Stage

40 Questions

Exam 2

Intercorporate Equity Investments: an Introduction

43 Questions

Exam 3

Business Combinations

43 Questions

Exam 3

Appendix A: AIncome Tax Allocation

6 Questions

Exam 4

Wholly Owned Subsidiaries: Reporting Subsequent Acquisitions

40 Questions

Exam 4

Appendix A: Wholly Owned Subsidiaries: Reporting Subsequent Acquisitions

4 Questions

Exam 4

Appendix B: Wholly Owned Subsidiaries: Reporting Subsequent Acquisitions

6 Questions

Exam 5

Consolidation of Non-Wholly Owned Subsidiaries

41 Questions

Exam 5

Appendix A: Step Purchases

6 Questions

Exam 5

Appendix B: Decreases in Ownership Interest

4 Questions

Exam 6

Subsequent-Year Consolidations: General Approach

40 Questions

Exam 6

Appendix A: Preferred and Restricted Shares of Investee Corporation

5 Questions

Exam 6

Appendix B: Intercompany Bond Holdings

6 Questions

Exam 7

Segment and Interim Reporting

41 Questions

Exam 8

Foreign Currency Transactions and Hedges

49 Questions

Exam 9

Reporting Foreign Operations

44 Questions

Exam 10

Financial Reporting for Not-For-Profit Organizations

46 Questions

Exam 11

Public Sector Financial Reporting

44 Questions

Show Answer