We are now ready to present examples of the statement of financial position and the statement of activities. To do that, we'll follow the activities of a nonprofit organization called Home4U, a daytime shelter for adults.
Let's assume that Home4U was incorporated in January 2013 and its accounting years will end on each December 31. The following transactions occurred during a three-month period.
January Transaction
Transaction 1. On January 31, a donor contributes $10,000, without restriction, for the operation of Home4U. This transaction affects the general ledger accounts as follows:
![18X-journal-01](http://www.accountingcoach.com/wp-content/uploads/2013/10/18X-journal-01.png)
Assuming this is the only transaction in January, the general ledger account balances will result in the following financial statements:
![18X-table-09](http://www.accountingcoach.com/wp-content/uploads/2013/10/18X-table-09.png)
![18X-table-10](http://www.accountingcoach.com/wp-content/uploads/2013/10/18X-table-10.png)
February Transactions
Transaction 2. On February 1, Home4U rents office space. A check is written for $2,000. This covers a one-time security deposit of $1,000 plus the February office rent of $1,000.
![18X-journal-02](http://www.accountingcoach.com/wp-content/uploads/2013/10/18X-journal-02.png)
Transaction 3. On February 2, a $400 check is written to the utility as a one-time security deposit for electricity and heat service.
![18X-journal-03](http://www.accountingcoach.com/wp-content/uploads/2013/10/18X-journal-03.png)
Transaction 4. On February 19, Home4U receives a contribution of $8,000 that the donor specifies must be used for the purchase of furniture. The contribution is deposited into a money market account. This transaction affects the general ledger accounts as follows:
![18X-journal-04](http://www.accountingcoach.com/wp-content/uploads/2013/10/18X-journal-04.png)
Transaction 5. The electricity and heating invoice has not arrived. It is estimated that the amount for February's usage was $350, so the following accrual adjusting entry is recorded on February 28:
![18X-journal-05](http://www.accountingcoach.com/wp-content/uploads/2013/10/18X-journal-05.png)
Assuming that Transactions 2 through 5 are the only transactions occurring in February, the general ledger account balances will result in the following financial statements:
![18X-table-11](http://www.accountingcoach.com/wp-content/uploads/2013/10/18X-table-11.png)
![18X-table-12](http://www.accountingcoach.com/wp-content/uploads/2013/10/18X-table-12.png)
![18X-table-13](http://www.accountingcoach.com/wp-content/uploads/2013/10/18X-table-13.png)
March Transactions
During March, Home4U paid the March rent of $1,000. Home4U also paid the February utilities which were equal to the estimated amount of $350. Home4U estimates that March's utilities will be $300.
On March 31, Home4U paid $8,300 to purchase furniture (using the restricted donation of $8,000). The statement of financial position dated March 31 will report the following amounts:
![18X-table-14](http://www.accountingcoach.com/wp-content/uploads/2013/10/18X-table-14.png)
![18X-table-15](http://www.accountingcoach.com/wp-content/uploads/2013/10/18X-table-15.png)
![18X-table-16](http://www.accountingcoach.com/wp-content/uploads/2013/10/18X-table-16.png)
No comments:
Post a Comment