Illustration of the Statement of Financial Position and the Statement of Activities

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
Assuming this is the only transaction in January, the general ledger account balances will result in the following financial statements:
18X-table-0918X-table-10

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
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
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
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
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-1118X-table-1218X-table-13

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-1418X-table-1518X-table-16

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